IMAGE  EVALUATION 
TEST  TARGET  (MT-3) 


V 


'^ 


^ 


^ 


/ 


0 


{/ 


:/ 


1.0 


I.I 


1.25 


iiM  III  28 

1= 

-  IIIIIM 

2.2 
2.0 

'*  u .- 

1.8 

1.4 

1.6 

V] 


<^ 


/a 


'<^1 


e". 


^A 


<■>■ 


6>. 


TM  *' 


o 


^ 


/ 


/A 


Photographic 

Sciences 
Corporation 


4cf. 


« 


.^.V 


^v^ 


<?>^ 


N> 


^ 


■1? 


A" 


fO^ 


6^ 


23  WEST  MAIN  STREET 

WEBSTER,  N.Y.  14580 

(716)  872-4503 


U  .^■S^,         ^ 


L* 


C\ 


\ 


C^ 


CIHM/ICMH 

Microfiche 

Series. 


CIHM/ICMH 
Collection  de 
microfiches. 


Canadian  Institute  for  Historical  Microreproductions  /  Institut  canadien  de  microreproductions  historiques 


Technical  and  Bibliographic  Notes/Notes  techniques  et  bibliographiques 


The 
to  t 


The  Institute  has  attempted  to  obtain  the  best 
original  copy  available  for  filming.  Features  of  this 
copy  which  may  be  bibliographically  unique, 
which  may  alter  any  of  the  images  in  the 
reproduction,  or  which  may  significantly  change 
the  usual  method  of  filming,  are  checked  below. 


L'Institut  a  microfilm^  le  meilleur  exemplaire 
qu'il  lui  a  6t6  pn:.sible  de  se  procurer.  Les  details 
de  cet  exemplaire  qui  sont  peut-dtre  uniques  du 
point  de  vue  bibliographique,  qui  peuvent  modifier 
une  image  reproduite,  ou  qui  peuvent  exiger  une 
modification  dans  la  mdthode  normale  de  filmage 
sont  indiquds  ci-dessous. 


The 
pos 
oft 
filnr 


n 


n 


D 


D 

□ 


D 


D 


Coloured  covers/ 
Couverture  de  couleur 


I      I    Covers  damaged/ 


Couverture  endommagde 


Covers  restored  and/or  laminated/ 
Couverture  restaurde  et/ou  pelliculde 


I      I    Cover  title  missing/ 


Le  titre  de  couverture  manque 


I      I    Coloured  maps/ 


Cartes  g^ographiques  en  couleur 

Coloured  ink  (i.e.  other  than  blue  or  black)/ 
Encre  de  couleur  (i.e.  autre  que  bleue  ou  noire) 


I      I    Coloured  plate»  and/or  '(lustrations/ 


Planches  et/ou  ifir'strations  en  couleur 

Bound  with  other  material/ 
Relid  avec  d'autres  documents 

Tight  binding  may  cause  shadows  or  distortion 
along  interior  margin/ 

La  reliure  serr^e  peut  causer  de  I'ombre  ou  de  la 
distortion  le  long  de  la  marge  int6rieure 

Blank  leaves  added  during  restoration  may 
appear  within  the  text.  Whenever  possible,  these 
have  been  omitted  from  filming/ 
II  se  peut  que  certaines  pages  blanches  ajoutdes 
lors  d'une  restauration  apparaissent  dans  le  texte, 
mais,  lorsque  cela  6tait  possible,  ces  pages  n'ont 
pas  6t6  filmdes. 

Additional  comments:/ 
Commentaires  suppldmentaires; 


D 
D 
D 
D 
D 
□ 


D 


Coloured  pages/ 
Pages  de  couleur 

Pages  damaged/ 
Pages  endommag^es 

Pages  restored  and/or  laminated/ 
Pages  restaur6es  et/ou  pellicul^es 

Pages  discoloured,  stained  or  foxed/ 
Pages  d6color6es,  tachet^es  ou  piqu^es 

Pages  detached/ 
Pages  d^tach^es 

Showthrough/ 
Transparence 


I      I    Quality  of  print  varies/ 


Quality  in^gale  de  I'impression 

Includes  supplementary  material/ 
Comprend  du  materiel  supplementaire 

Only  edition  available/ 
Seule  Edition  disponible 


Pages  wholly  or  partially  obscured  by  errata 
slips,  tissues,  etc.,  have  been  refilmed  to 
ensure  the  best  possible  image/ 
Les  pages  totalement  ou  partiellement 
obscurcies  par  un  feuillet  d'errata,  une  pelure, 
etc.,  ont  6X6  film^es  6  nouveau  de  fapon  d 
obtenir  la  meilleure  image  possible. 


Ori( 
beg 
the 
sioi 
oth 
firs 
sioi 
or  i 


The 
sha 
TIN 
whi 

Mai 
diff 
enti 
beq 
righ 
reqi 
mei 


This  item  is  filmed  at  the  reduction  ratio  checked  below/ 

Ce  document  est  filmd  au  taux  de  reduction  indiqu6  ci-dessous. 

10X  14X  18X  22X 


26X 


30X 


y 

/- 

12X 


16X 


20X 


24X 


28X 


32X 


The  copy  filmed  here  has  been  reproduced  thanks 
to  the  generosity  of: 

IMilli  IVIemorlal  Library 
lyflclVlaster  University 


L'exemplaire  filmd  fut  reproduit  grAce  d  la 
g6n6rosit6  de: 

Mills  Memorial  Library 
McMaster  University 


The  images  appearing  here  are  the  best  quality 
possible  considering  the  condition  and  legibility 
of  the  origina:  copy  and  in  keeping  with  the 
filming  contract  specifications. 


Les  images  suivantes  ont  dt6  reproduites  avec  le 
plus  grand  soin,  compte  tenu  de  la  condition  et 
de  la  nettetd  de  l'exemplaire  film6,  et  en 
conformity  avec  les  conditions  du  contrat  de 
filmage. 


Original  copies  in  printed  paper  covers  are  filmed 
beginning  with  the  front  cover  and  ending  on 
the  last  page  with  a  printed  or  illustrated  impres- 
sion, or  the  back  cover  when  appropriate.  All 
other  original  copies  are  filmed  beginning  on  the 
first  page  with  a  printed  or  illustrated  impres- 
sion, and  ending  on  the  last  page  with  a  printed 
or  illustrated  impression. 


Les  exemplaires  originaux  dont  la  couverture  en 
papier  est  imprim^e  sont  filmds  en  commenpant 
par  le  premier  plat  et  en  terminant  soit  par  la 
dernidre  page  qui  comporte  une  empreinte 
d'impression  ou  d'illustration,  soit  par  le  second 
plat,  selon  le  cas.  Tous  les  autres  exemplaires 
originaux  sont  filmds  en  commenpant  par  la 
premidre  page  qui  comporte  une  empreinte 
d'impression  ou  d'illustration  et  en  terminant  par 
la  dernidre  page  qui  comporte  une  telle 
empreinte. 


The  last  recorded  frame  on  each  microfiche 
shall  contain  the  symbol  — <»>  (meaning  "CON- 
TINUED "),  or  the  symbol  V  ^meaning  "END"), 
whichever  applies. 


Un  des  symboles  suivants  apparaitra  sur  la 
dernidre  image  de  cheque  microfiche,  selon  le 
cas:  le  symbole  ^^-  signifie  "A  SUIVRE",  le 
symbole  V  signifie  "FIN". 


Maps,  plates,  charts,  etc.,  may  be  filmed  at 
different  reduction  ratios.  Those  too  large  to  be 
entirely  included  in  one  exposure  are  filmed 
beginning  in  the  upper  left  hand  corner,  left  to 
right  and  top  to  bottom,  as  many  frames  as 
required.  The  following  diagrams  illustrate  the 
method: 


Les  cartes,  planches,  tableaux,  etc.,  peuvent  dtre 
filmds  d  des  taux  de  reduction  diffdrents. 
Lorsque  le  document  est  trop  grand  pour  dtre 
reproduit  en  un  seul  clichd,  il  est  filmd  d  partir 
de  Tangle  supdrieur  gauche,  de  gauche  d  droite, 
et  de  haut  en  bas,  en  prenant  le  nombre 
d'images  ndcessaire.  Les  diagrammes  suivants 
illustrent  la  mdthode. 


r         1 

i 

^'  '  i  .  : 

3 

1 

1 

3 

4 

5 

6 

SELECTIONS 


ILLUSTRATING 


ECONOMIC   HISTORY 


SINCE  THE  SEVEN   YEARS'  WAR. 


COMPILED   BV 

BENJAMIN    RAND,  Ph.D., 

ASSISTANT     IN     PlULOSOPHy,   HARVARD    UNIVEUSITY. 


,^„-    Second  lEbttton, 

HE  VISED   AND   ENLAJS^ED. 


Mi 


CAMBRIDGE : 

JOHN    WILSON    AND    SON. 

JSniijerBitg  Press. 

1892. 


1 


■te} 

I 


mmi 


Copyright,  1892, 
Br    Benjamin    Rand. 


PREFATORY  NOTE 


TO  THE  SECOND  EDITION. 


"  I  "HE  first  edition  of  these  selections  was  published 
as  a  text-book  of  required  reading  to  accom- 
pany r  course  of  lectures  on  economic  history  given 
at  Harvard  College.  It  was  also  adopted  for  a 
similar  purpose  by  other  American  Universities.  A 
continued  demand  for  the  work  has  led  to  the 
preparation  of  the  present  revised  and  enlarged 
edition.  The  design  of  the  book  has  been  to  ex- 
hibit in  a  series  of  articles  of  permanont  value 
different  phases  of  economic  tliought,  and  to  pre- 
sent in  chronological  order  a  narrative  of  some  of 
the  more  important  events  and  influences  of  modern 
economic    history. 

In  this  edition  one  chapter  contained  in  the 
former  edition  has  been  omitted  and  five  new 
selections  have  been  introduced.  Appendices  have 
also  been  added  as  the  most  convenient  form  in 
which  to  place  laws,  purely  statistical  material,  and 


IV 


PREFATORY  NOTE. 


very  recent  economical  data.  A  bibliography  has 
hkewise  been  inserted,  which  it  is  lioped  may  be 
of  service  in  the  formation  of  special  libraries  of 
economic  history.  The  present  edition  moreover 
contains   an   index. 

The  names  of  publishers,  to  whose  courtesy  is  due 
the  permission  to  reprint  a  number  of  the  selections, 
will    be  found   at   the   beginning   of    the   respective 

chapters. 

B.  R. 

CxMimiDOE,  December,  1891. 


CONTENTS. 


(,'hapter 

1.     Thk  Colonial  Policy  of  Euroi'e 

From  Adam  Smith's  Wealth  of  Niitious. 

II.     TiiK  Ctkeat  Inventions 

From  Spencer  Walpole's  History  of  England. 

III.  Economic  Causes  of  the  Fkench  Revolution 

,      From  Ileinrich  Von  Sybel's  French  Revolution. 

IV.  The  Edicts  op  Stein  and  HAiJDENBEKa: 

The  Emancipating  Edict  of  Stein 
From  J.  R.  Seeley's  Life  and  Times  of  Stein. 

The  Agrarian  Legislation  of  Hardenbercj 
From  R.  B.  D.  Morior's  "  The  Agrarian  Legislation 
of  Prussia  in  the  Present  Century  "  in  Systems  of 
Land  Tenure  in  Various  Countries. 


V.     The  Orders  in  Council  .     . 

From  Leone  Levi's  History  of  British  Commerce. 

VI.     The  Finances  of  England,  l70.'^-lSir>  .... 
From  G.  R.  Porter's  Progress  of  the  Nation. 

VII.     La  Politique  C^mmerciale  de  la  Restauratton 

From  E.  Levasseur's  Ilistoire  dcs  Classes  Ouvriferes 
en  France  depuis  1789  jusqu'ii  nos  Jours. 

VIII.     The  ZoLLvi'iREiN 

From  John  Bowring's  Report  on  the  Prussian  Com- 
mercial Union,  Pari.  Doc,  1840. 

Le  Zollverein     

From  A.  Legoyt's  La  France  et  I'Jitranger. 


31 


55 


8(5 


98 


109 


I2fi 


148 


170 


I9f; 


\i 


■'», 


VI  CONTENTS. 

('ilAI'TKR  PAOIC 

\  IX.     The  Coun  Laws,  1801-1849 liOT 

Troin  Leono  Levi's  History  of  British  Commerce. 

X.     The  Nkw  Gold 242 

From  J.  E.  Cairnes'  Essays  iu  Political  Ecouoiny. 

XI.     Fbance  sous  le  Second  Empiue 1^84 

From  E.  Levasseur's  llistoire  des  Classes  Ouvricres 
ea  France  depuis  1789  jusqii'A  nos  Jours. 

XII.     Recent  Changes  in  Tuanspobtation  and  Viw. 

DUCTION !398 

From  David  A.  Wells'  Recent  Economic  Changes. 

XIII.  The  FnENCii  Ixdemnfty: 

The  Payment  ok  the  Five  MiTiLiAiiDS  .     .     .     326 
From  Blackwood's  Edinburgii  Magazine,  1875. 

Thk  Application  of  the  Indemnity      .     .     .     .'WO 

From   G.    Fr.    Kolb's   The   Condition    of    Nations 
(Trans.  Mrs.  Brewer). 

XIV.  The  Liquidations  of  1S73-7G 355 

From  llobert  Giffen's  Essays  in  Finance. 

XV.     The  United  States  in  1880: 

The   Inckease   of   Population   from  17!)0  to 

1880 375 

From  Francis  A.  Walker  and  Henry  Ganiiett's  Re- 
port on  the  Progress  of  the  Nation,  Tenth  Census. 

The  Factory  System 400 

From  Carroll   U.   Wright's   Report  on  tlio  Factory 
System  of  the  United  States,  Tenth  Census. 

The  Cotton  Manufactures 410 

From   Edward    Atkinson's    Report  on   the  Cotton 
Manufactures,  Tenth  Census 

The  Ikon  and  Steel  Industries 435 

From  J!i,mps  M.  Swank's  Statistics  of  the  Iron  and 
Steel  Production,  Tenth  Census. 


% 


CONTENTS. 


?u 


ClMPTEB  PA0« 

XVI.      Lkm   DkTTES  ruilLIQUKrt 460 

From   Alfred    Neyinarck's    Les    Dcttes    Publiques 
Europeeiuies. 

XVII.     TnK  Wound's  Pkoouess  in  Tuade  and  Induhtry     469 
From  F.  X.  von  Nouiiiann-Spallart's  Uebersichten 
der  Weltwirthscliaft  (Translated  in  Journal  of  the 
Statistical  Society). 


8r).5 


.•575 


400 


410 


435 


APPENDICES. 

I.     Leading  Sections  fbom  the  Enolish  Navigation 

Acts 611 

From  English  Statutes  at  Large. 

II.  Impoktaxt    Sections    ok    American    Navigation 

Acts 616 

From  United  States  Statutes  at  Large. 

III.  The  American  Civil  War: 

Cost  ok  the  Civil  War 520 

From  David  A.  Wells'  Report  as  Special  Commissioner 
of  the  Revenue,  1869. 

The  Payment  ok  the  War  Debt 522 

From  Hugh  McCulloch's  Report  as  Secretary  of  the 
Treasury,  1884. 

IV.     The  Growth  ok  Canada,  1807-1890    .....     525 
From  George  Johnson's  Graphic  Statistics  of  Canada. 

V.     The  United  States  in  1890: 

The  Population  of  the  United  States,  1890    .     526 

By  Robert  P.Porter  [Eleventh  Census  Bulletin,  No.  16]. 

Iron  and  Steel  Industries: 

Iron-Ore  Mining  Industry 529 

By  John  Birkinbine  [Eleventh    Census    Bulletin, 
No.  113]. 


^^ 


m 


CONTENTS. 


V.     TiiK  Unitki)  Htatks  in   1890  {Continued)  : 

PkOUUCTION   ok   I'ld-IUON 

By  William  M.  Sweet  [Eluveuth  Census  liuUutiu, 
No.  0]. 

PuonucTioN  OK  Stki;l ,     .     . 

By  William  M.   Sweet  [Eleveuth  Census  Bulletin, 
No.  13]. 

MUNICITAI.    KkCKII'TS    AM)    I'iXI'KN'lJlTUUKH      .       . 

Sunuiiaiy  of  Report  of  J.  K.  Upton,  by  Uobert   P. 
Porter  [Eleventh  Census  Bulletin,  No.  82]. 

National,  Statk,  and  County  lM)Kin'Ki)NK.s.s    . 
Summary  of   Report  of  J.  K.   Upton,  by   Robert   P. 
Porter  [Eleventh  Census  bulletin,  No.  61]. 


I' AUK 

r,;;8 

512 
54;i 


Biuliooraphy 545 

1ni>kx 557 


Paom 

535 


ECONOMIC   HISTORY. 


5;i8 


.     542 


545 

557 


I. 


THE  COLONIAL   POLICY  OF   EUROPE. 

From  Adam  Smith's  Wealth  ok  Nations,  Book  IV.,  Cn.  VII., 

Paut  II. 

TITE  colony  of  a  civilized  nation  which  takes  possession 
either  oi'  a  wnste  country  or  of  one  so  tliiuly  inhahitod 
that  the  natives  easily  give  place  to  the  new  settlers,  ad- 
vanco«  "loi-e  rapidly  to  wealth  and  greatness  than  any  other 
human  society. 

The  colonists  carry  out  with  them  a  knowledge  of  agri- 
culture and  of  other  useful  arts,  superior  to  what  can  grow 
up  of  its  own  accord  in  the  course  of  many  centuries  among 
savage  and  liarbarous  nations.  They  carry  out  with  them, 
too,  the  habit  of  8ul)ordination,  some  notion  of  the  regular 
government  which  takes  place  in  their  own  country,  of  the 
system  of  laws  which  sup[)orts  it,  and  of  a  regular  adminis- 
tration of  justice;  and  they  naturally  establish  something  of 
tlie  same  kind  in  the  new  settlement.  But  among  savage 
and  barbarous  nations  the  natural  progress  of  law  and  gov- 
ernment is  still  slower  than  the  natural  progress  of  arts, 
after  law  and  government  have  been  so  far  established  as  is 
necessary  for  their  protection.  Every  colonist  gets  more 
land  than  he  c.'in  possibly  cultivate.  He  has  no  rent,  and 
scarce  any  taxes  to  pay.  No  landlord  shares  with  him  in 
its  produce,  and  the  share  of  the  sovereign  is  commonly  but 
a  trifle.  He  has  every  motive  to  render  as  great  as  possible 
a  produce  which  is  thus  to  be  almost  entirely  his  own.     But 

1 


2 


ECONOMIC  HISTORY. 


his  land  is  commonly  so  extensive  that  with  all  his  own 
industry,  and  with  all  the  industry  of  other  people  whom  he 
can  get  to  employ,  he  can  sr  Idom  make  it  produce  the  tenth 
part  of  what  it  is  capable  of  producing.  He  is  eager,  there- 
fore, to  collect  laborers  from  all  quarters,  and  to  reward 
them  with  the  most  liberal  wages.  But  those  liberal  wages, 
joined  to  the  plenty  and  cheapness  of  laud,  soon  make  those 
laborers  leave  him,  in  order  to  become  landlords  themselves, 
and  to  reward,  with  equal  liberality,  other  laborers,  who 
soon  leave  them  for  the  same  reason  that  they  left  their  first 
master.  The  'liberal  reward  of  labor  encourages  marriage. 
The  children,  during  the  tender  years  of  infancy,  are  well 
fed  and  properly  taken  care  of,  and  when  they  are  grown 
up  the  value  of  their  labor  greatly  overpays  their  mainten- 
ance. AVhen  arrived  at  maturity  the  high  price  of  labor 
and  the  low  price  of  land  enable  them  to  establish  them- 
selves in  the  same  manner  as  their  fathers  did  before  them. 

In  other  countries  rent  and  profit  eat  up  wages,  and  the 
two  superior  orders  of  people  oppress  the  inferior  one.  But 
in  new  colonics  the  interest  of  the  two  superior  orders  obliges 
them  to  treat  the  inferior  one  with  more  generosity  and 
humanity ;  at  least,  where  that  inferior  one  is  not  in  a  state 
of  slavery.  Waste  lands,  of  the  greatest  natural  fertility, 
are  to  be  had  for  a  trifie.  The  increase  of  revenue  which 
the  proprietor,  who  is  always  the  undertaker,  expects  from 
their  improvement,  constitutes  his  profit;  which  in  these 
circumstances  is  commonly  very  great.  But  this  great  profit 
cannot  be  made  without  employing  the  labor  of  other  people 
in  clearing  and  cultivating  the  land;  and  the  disproportion 
between  the  great  extent  of  the  land  and  the  small  number 
of  the  people,  which  commonly  takes  place  in  new  colonies, 
makes  it  difticult  for  him  to  get  this  labor.  He  does  not, 
therefore,  dispute  about  wages,  but  is  willing  to  employ 
labor  at  any  price.  The  high  wages  of  labor  encourage 
population.  The  cheapness  and  plenty  of  good  land  encour- 
age improvement,  and  enable  the  proprietor  to  ])ay  those 
high  wages.  In  those  wages  consists  almost  the  svhole  price 
of  the  land;  and  though  they  are  high,  considered  as  the 


COLONIAL  POLICY  OF  EUROPE. 


is  own 
lom  he 
3  tenth 
there - 
reward 
wages, 
e  those 
laelves, 
s,   who 
cir  first 
irriage. 
,re  well 
1  grown 
laintcn- 
A  labor 
h  them- 
thcm. 
and  the 
ic.     But 
s  obliges 
kity  and 
(1  a  state 
"crtility, 
le  which 
cts  from 
in  these 
at  profit 
r  people 
oportion 
number 
colonies, 
oes  not, 
employ 
icourage 
encour- 
,y  those 
|ole  price 
id  as  the 


wages  of  labor,  they  are  low,  considered  as  the  price  of  what 
is  so  very  valuable.  What  encourages  the  progress  of  popu- 
lation and  improvement  encourages  that  of  real  Avealth  and 
greatness. 

The  progress  of  many  of  the  ancient  Greek  colonics 
towards  wealth  and  greatness  seems  accordingly  to  have 
been  very  rapid.  In  the  course  of  a  century  or  two  several 
of  them  appear  to  have  rivalled,  and  even  to  have  surpassed, 
their  mother  cities.  Syracuse  and  Agrigentum  in  Sicily, 
Tarentum  and  Locri  in  Italy,  Ephesus  and  Miletus  in  Lesser 
Asia,  appear  by  all  accounts  to  have  been  at  least  equal  to 
any  of  the  cities  of  ancient  Greece.  Though  posterior  in 
their  establishment,  yet  all  the  arts  of  refinement,  philoso- 
phy, poetry,  and  eloquence,  seem  to  have  been  cultivated  as 
early,  and  to  have  been  improved  as  highly  in  them  as  in 
any  part  of  the  mother  country.  The  schools  of  the  two  old- 
est Greek  philosophers,  those  of  Thales  and  Pythagoras,  Avere 
established,  it  is  remarkable,  not  in  ancient  Greece,  but  the 
one  in  an  Asiatic,  the  other  in  an  Italian  colony.  All  those 
colonies  had  established  themselves  in  countries  inhabited 
by  savage  and  barbarous  nations,  who  easily  gave  jilace  to 
the  new  settlers.  They  had  plenty  of  good  land,  and  as  thoy 
were  altogether  independent  of  the  mother  city,  they  were 
at  liberty  to  manage  their  own  affairs  in  the  way  that  they 
judged  was  most  suitable  to  their  own  interest. 

The  history  of  the  Roman  colonies  is  l)y  no  means  so  bril- 
liant. Some  of  them,  indeed,  such  as  Florence,  have  in  the 
course  of  many  ages,  and  after  the  fall  of  the  mother  city, 
grown  up  to  be  consideralde  States.  Rut  the  progress  of  no 
one  of  them  seems  ever  to  have  l)een  very  rapid.  They  were 
all  established  in  conquered  provinces,  whic^  in  most  cases 
had  been  fully  inhabited  before.  The  quantity  of  land  as- 
signed to  each  colonist  was  seldom  very  considerable,  and, 
as  the  colony  was  not  indej)endent,  they  were  not  always  at 
lil)crty  to  manage  their  own  affairs  in  tlie  way  that  they 
judged  was  most  suitable  to  their  own  interest. 

In  the  plenty  of  good  land  the  European  colonies  estab- 
lished in  America  and  the  West  Indies  resemble,  and  even 


"jjFjijwfijniimjw 


ECONOMIC  HISTORY. 


greatly  surpass,  those  of  ancient  Greece.  In  their  depend- 
ency upon  the  mother  State  they  resemble  those  of  ancient 
Rome;  but  their  great  distance  from  Europe  has  in  all  of 
them  alleviated  more  or  less  the  effects  of  this  dependency. 
Their  situation  has  placed  them  less  in  the  view  and  less  in 
the  power  of  their  mother  country.  In  pursuing  their  inter- 
est their  own  way,  their  conduct  has,  upon  many  occasions, 
been  overlooked,  either  because  not  known  or  not  under- 
stood in  Europe ;  and  upon  some  occasions  it  has  been  fairly 
suffered  and  submitted  to,  because  their  distance  rendered 
it  difficult  to  restrain  it.  Even  the  violent  and  arbitrary 
government  of  Spain  has,  upon  many  occasions,  been  obliged 
to  recall  or  soften  the  orders  which  had  been  given  for  the 
government  of  her  colonies,  for  fear  of  a  general  insurrection. 
The  progress  of  all  the  European  colonies  in  wealth,  popula- 
tion, and  improvement,  has  accordingly  been  very  great. 

The  croAvn  of  Spain,  by  its  share  of  the  gold  and  silver, 
derived  some  revenue  from  its  colonies  from  the  moment  of 
their  first  cstal)lishmcnt.  It  Avas  a  revenue,  too,  of  a  nature 
to  excite  in  human  avidity  the  most  extravagant  expectations 
of  still  greater  riches.  The  Spanish  colonics,  therefore, 
from  the  moment  of  their  first  establishment,  attracted  very 
much  the  attention  of  their  mother  country;  while  those  of 
the  other  European  nations  were  for  a  long  time  in  a  great 
measure  neglected.  The  former  did  not,  perha])s,  thrive 
the  better  in  consequence  of  this  attention,  nor  the  latter  the 
worse  in  consequence  of  this  neglect.  In  proportion  to  the 
extent  of  the  country  which  they  in  some  measure  possess, 
the  Spanish  colonies  are  considered  as  less  poi)ulous  and 
thriving  than  those  of  almost  any  other  European  nation. 
The  progress  even  of  the  Spanish  colonies,  however,  in  po])u- 
lation  and  improvement,  has  certainly  been  very  rai)id  aiul 
very  great.  The  city  of  Lima,  founded  since  the  conquest, 
is  represented  in  Ulloa  as  containing  fifty  thousand  inhabit- 
ants near  thirty  years  ago.  Quito,  which  liad  l)cen  but  a 
miserable  hamlet  of  Indians,  is  represented  l)y  the  same 
author  as  in  his  time  equally  populous.  Gcinelli  Carreri,  a 
pretended  traveller,  it  is  said,  indeed,  but  who  seems  every- 


COLONIAL  POLICY  OF  EUROPE. 


where  to  have  written  upon  extreme  good  information, 
represents  the  city  of  Mexico  as  containing  a  hundred  thou- 
sand inhabitants,  — a  number  which,  in  spite  of  all  the  exag- 
gerations of  the  Spanish  writers,  is  probably  more  than  five 
times  greater  than  what  it  contained  in  the  time  of  Monte- 
zuma. These  numbers  exceed  greatly  those  of  Boston,  New 
York,  and  Philadelphia,  the  three  greatest  cities  of  the 
English  colonies.  Before  the  conquest  of  the  Spaniards 
there  were  no  cattle  fit  for  draught  either  in  Mexico  or  Peru. 
The  lama  was  their  only  beast  of  burden,  and  its  strength 
seems  to  have  been  a  good  deal  inferior  to  that  of  a  common 
ass.  The  plough  was  unknown  among  them.  They  were 
ignorant  of  the  use  of  iron.  They  had  no  coined  money,  nor 
any  established  instrument  of  commerce  of  any  kind.  Their 
commerce  was  carried  on  by  barter.  A  sort  of  wooden  spade 
was  their  principal  instrument  of  agriculture.  Sharp  stones 
sei'ved  them  for  knives  and  hatchets  to  cut  with ;  fish-bones 
and  the  hard  sinews  of  certain  animals  served  them  for 
needles  to  sew  with;  and  these  seem  to  have  been  their 
principal  instruments  of  trade.  In  this  state  of  things,  it 
seems  impossible,  that  either  of  those  empires  could  have 
been  so  much  improved  or  so  well  cultivated  as  at  pres- 
ent, when  they  are  plentifully  furnished  with  all  sorts  of 
Europenn  cattle,  and  when  the  use  of  "iron,  of  the  plough, 
and  of  many  of  the  arts  of  Europe,  has  been  introduced 
among  them.  But  the  populousness  of  every  country  must 
be  in  proportion  to  the  degree  of  its  improvement  and  culti- 
vation. In  spite  of  the  ciiiel  destruction  of  the  natives 
which  folloAved  the  conqiicst,  these  two  great  empires  are, 
probably,  more  populous  now  than  they  ever  were  before: 
and  the  people  are  surely  very  different;  for  we  must  ac- 
knowledge, I  apprehend,  that  the  Spanish  Creoles  are  in 
many  respects  superior  to  the  ancient  Indians. 

After  the  settlements  of  the  Spaniards,  that  of  the  Portu- 
guese in  Brazil  is  the  oldest  of  any  European  nation  in  Amer- 
ica. But  as  for  a  long  time  after  the  first  discovery  neither 
gold  nor  silver  mines  were  found  in  it,  and  as  it  afforded 
upon  that  account  little  or  no  revenue  to  the  crown,  it  was 


6 


ECONOMIC  HISTORY. 


for  a  long  time  in  a  great  measure  neglected;  and  during 
this  state  of  neglect  it  grew  up  to  be  a  great  and  powerful 
colony.  While  Portugal  was  under  the  dominion  of  Spain, 
Brazil  was  attacked  by  the  Dutch,  who  got  possession  of 
seven  of  the  fourteen  provinces  into  which  it  is  divided. 
They  expected  soon  to  conquer  the  other  seven,  when  Portu- 
gal recovered  its  independency  by  the  elevation  of  the  family 
of  Bi-aganza  to  the  throne.  The  Dutch  then,  as  enemies  to 
the  Spaniards,  became  friends  to  the  Portuguese,  who  were 
likewise  the  enemies  of  the  Si)aniards.  They  agreed,  there- 
fore, to  leave  that  part  of  Brazil  which  they  had  not  con- 
quered to  the  king  of  Portugal,  who  agreed  to  leave  that  part 
which  they  had  conquered  to  them,  as  a  matter  not  worth 
disputing  about  with  such  good  allies.  But  the  Dutch 
government  soon  began  to  oppress  the  Portuguese  colonists, 
who,  instead  of  amusing  themselves  with  complaints,  took 
arms  against  their  new  masters,  and  by  their  own  valor  and 
resolution,  with  the  connivance  indeed,  but  without  any 
avowed  assistance  from  the  mother  country,  drove  them  out 
of  Brazil.  The  Dutch,  therefore,  finding  it  impossible  to  keep 
any  part  of  the  country  to  themselves,  were  contented  that 
it  should  be  entirely  restored  to  the  crown  of  Portugal,  in 
this  colony  there  are  said  to  be  more  than  six  hundred  thou- 
sand people,  either  Portuguese  or  descended  from  Portuguese, 
Creoles,  mulattoos,  and  a  mixed  race  between  Portuguese  and 
Brazilians.  No  one  colony  in  America  is  supposed  to  contain 
so  great  a  number  of  people  of  European  extraction. 

Towards  the  end  of  the  fifteenth,  and  during  the  greater 
part  of  the  sixteenth  century,  Spain  and  Portugal  were  the 
two  great  naval  powers  upon  the  ocean ;  for  though  the  com- 
merce of  Venice  extended  to  every  part  of  Europe,  its  fleets 
had  scarce  ever  sailed  beyond  the  Mediterranean.  The  Span- 
iards, in  virtue  of  the  first  discovery,  claimed  all  America 
as  their  own ;  and  though  they  could  not  hinder  so  great  a 
naval  power  as  that  of  Portugal  from  settling  in  Brazil,  such 
was  at  that  time  the  terror  of  their  name  that  the  greater 
part  of  the  other  nations  of  Europe  were  afraid  to  establish 
themselves  in  any  other  part  of  that  great  continent.     The 


COLONIAL  POLICY  OF  EUROPE. 


I  during 
powerful 
)f  Spain, 
ission  of 
divided. 
3n  Portu- 
he  family 
ncmies  to 
Avlio  were 
ed,  there- 
L  not  con- 
)  tliat  part 
not  worth 
the  Dutch 
!  colonists, 
lints,  took 
1  valor  and 
ithout  any 
re  them  out 
ible  to  keep 
tented  that 
rtugal.     lu 
ndred  thou- 
Portuguesc, 
tugucse  and 
d  to  contain 

)n. 
the  greater 
^al  were  the 
irh  the  corn- 
its  fleets 
The  Span- 
all  America 
r  so  great  a 
Brazil,  such 
the  greater 
to  establish 
Itineut.     The 


W-. 


'M 


French  who  attempted  to  settle  in  Florida  were  all  mur- 
dered by  the  Spaniards.  But  the  declension  of  the  naval 
power  of  this  latter  nation,  in  consequence  of  the  defeat  or 
miscarriage  of  what  they  called  their  Invincible  Armada, 
which  haj)j)ened  towards  the  end  of  the  sixteenth  century, 
put  it  out  of  their  power  to  obstruct  any  longer  the  settle- 
ments of  the  other  European  nations.  In  the  course  of  the 
seventeenth  century,  therefore,  the  English,  French,  Dutch, 
Danes,  and  Swedes,  all  the  great  nations  who  had  any  ports 
ui)on  the  ocean,  attempted  to  make  some  settlements  in  the 
new  world. 

The  Swedes  established  themselves  in  New  Jersey;  and 
the  number  of  Swedish  families  still  to  be  found  there  suffi- 
ciently demonstrates  that  this  colony  was  very  likely  to 
prosper  had  it  been  protected  by  the  mother  country.  But 
being  neglected  by  Sweden  it  was  soon  swallowed  up  by  the 
Dutch  colony  of  New  York,  which  again,  in  1674,  fell  under 
the  dominion  of  the  English. 

The  small  islands  of  St.  Thomas  and  Santa  Cruz  are  the 
only  countries  in  the  new  world  that  have  ever  been  pos- 
sessed by  the  Danes.  These  little  settlements  too  were 
under  the  government  of  an  exclusive  company,  which  had 
the  sole  right  both  of  purchasing  the  surplus  produce  of  the 
colonists  and  of  supplying  them  M-ith  such  goods  of  other 
countries  as  they  wanted,  and  which,  therefore,  both  in  its 
purchases  and  sales,  had  not  only  the  power  of  oppressing 
them,  but  the  greatest  temptation  to  do  so.  The  government 
of  an  exclusive  company  of  merchants  is,  perhaps,  the  worst 
of  all  governments  for  any  country  whatever.  It  Avas  not, 
however,  able  to  stop  altogether  the  progress  of  these  colo- 
nies, though  it  rendered  it  more  slow  and  languid.  The 
late  king  of  Denmark  dissolved  this  company,  and  since  that 
time  the  prosperity  of  these  colonies  has  been  very  great. 

The  Dutch  settlements  hi  the  West,  as  well  as  those  in  the 
East  Indies,  were  originally  put  under  the  governuKMit  of  an 
exclusive  company.  The  progress  of  some  of  them,  there- 
fore, though  it  has  been  considerable,  in  comparison  with 
that  of  almost  any  country  that  has  been  long  peopled  and 


!l| 


8 


ECONOMIC  HISTORY. 


established,  has  been  languid  and  slow  in  comparison  with 
that  of  the  greater  part  of  new  colonies.  The  colony  of 
Surinam,  though  very  considerable,  is  still  inferior  to  the 
greater  part  of  the  sugar  colonies  of  the  other  European 
nations.  The  colony  of  Nova  Belgia,  now  divided  into  the 
two  provinces  of  New  York  and  New  Jersey,  would  probably 
have  soon  become  considerable  too,  even  though  it  had  re- 
mained under  the  government  of  the  Dutch.  The  plenty  and 
cheapness  of  good  land  are  such  powerful  causes  ot  prosper- 
ity that  the  very  worst  government  is  scarce  capable  of 
checking  altogether  the  efiicacy  of  their  operation.  The 
great  distance  too  from  the  mother  country  would  enable  the 
colonists  to  evade  more  or  less,  by  smuggling,  the  monopoly 
which  the  company  enjoyed  against  them.  At  present  the 
company  allows  all  Dutch  ships  to  trade  to  Surinam  upon 
paying  two  and  a  half  per  cent  upon  the  value  of  their  cargo 
for  a  license;  and  only  reserves  to  itself  exclusively  the  di- 
rect trade  from  Africa  to  America,  which  consists  almost 
entirely  in  the  slave  trade.  This  relaxation  in  the  exclu- 
sive privileges  of  the  company  is  probably  the  principal  cause 
of  that  degree  of  prosperity  which  that  colony  at  present 
enjoys.  Cura^oa  and  Eustatia,  the  two  principal  islands 
belonging  to  the  Dutch,  are  fi-ee  ports  open  to  the  ships  of 
all  nations;  and  this  freedom,  in  the  midst  of  better  colo- 
nies whose  ports  are  open  to  those  of  one  nation  only,  has 
been  the  great  cause  of  the  prosperity  of  those  two  barren 
islands. 

The  French  colony  of  Canada  was,  during  the  (greater 
part  of  the  last  century,  and  some  part  of  the  present,  under 
the  government  of  an  exclusive  company.  Under  so  unfav- 
orable an  administration  its  progress  was  necessarily  very 
slow  in  comparison  with  that  of  other  new  colonies ;  but  it  be- 
came much  more  rapid  when  this  company  was  dissolved  after 
the  fall  of  what  is  called  the  Mississippi  scheme.  When  the 
English  got  possession  of  this  country  they  found  in  it  near 
double  the  number  of  inhabitants  which  Father  Charlevoix 
had  assigned  to  it  between  twenty  and  thirty  years  before. 
That  Jesuit  had  travelled  over  the  whole  country,  and  had 


COLONIAL  POLICY  OF  EUROPE. 


9 


with 
ny  of 
to  the 
'opcan 
ito  the 
obably 
lad  rc- 
ity  and 
irosper- 
iblc   of 
The 
able  the 
Lonopoly 
sent  the 
im  upon 
eir  cargo 
y  the  di- 
9  ahnost 
[\Q  exclu- 
ipal  cause 
t  present 
il   islands 
e  ships  of 
jtter  colo- 

only,  has 
0  barren 

lie  ji;reater 
lent,  under 

so  unfav- 
larily  very 
I;  but  it  bc- 
lolvcd  after 

When  the 
.  in  it  near 
Icharlevoix 
]ars  before. 
[y,  and  had 


no  inclination  to  represent  it  as  less  considerable  than  it 
really  was. 

The  French  colony  of  St.  Domingo  was  established  by 
pirates  and  freebooters,  Avho  for  a  long  time  neither  re- 
quired the  protection  nor  acknowledged  the  authority  of 
France ;  and  when  that  race  of  banditti  became  so  far  citi- 
zens as  to  acknowledge  this  authority,  it  was  for  a  long  time 
necessary  to  exercise  it  with  very  great  gentleness.  During 
this  period  the  population  and  improvement  of  this  colony 
increased  very  fast.  Even  the  oppression  of  the  exclusive 
company,  to  which  it  was  for  some  time  subjected,  with  all 
the  other  colonies  of  France,  though  it  no  doubt  retarded, 
had  not  lieen  able  to  stop  its  progress  altogether.  The 
course  of  its  prosperity  returned  as  soon  as  it  was  relieved 
from  that  oppression.  It  is  now  the  most  important  of  the 
sugar  colonies  of  the  West  Indies,  and  its  produce  is  said  to 
be  greater  than  that  of  all  the  English  sugar  colonies  put  to- 
gether. The  other  sugar  colonies  of  France  are  in  general 
all  very  thriving. 

But  there  are  no  colonies  of  which  the  progress  has  been 
more  rapid  than  that  of  the  English  in  North  America. 

Plenty  of  good  land  and  liberty  to  manage  their  own 
affairs  their  own  way,  seem  to  be  the  two  great  causes  of  the 
prosperity  of  all  new  colonies. 

In  the  plenty  of  good  land,  the  English  colonies  of  North 
America,  though  no  doubt  very  abundantly  provided,  are, 
however,  inferior  to  those  of  the  Spaniards  and  Portuguese, 
and  not  superior  to  some  of  those  possessed  by  the  French 
before  the  late  war.  But  the  political  institutions  of  the 
English  colonies  have  been  more  favorable  to  the  improve- 
ment and  cultivation  of  this  land  than  those  of  any  of  the 
other  three  nations. 

First,  the  engrossing  of  uncultivated  land,  though  it  has 
by  no  means  been  prevented  altogether,  has  been  more  re- 
strained in  the  English  colonies  than  in  any  other.  The 
colony  law  which  imposes  upon  every  proprietor  the  obliga- 
tion of  improving  and  cultivating,  within  a  limited  time,  a 
certain  proportion  of  his  lands,  and  which,  in  case  of  failure, 


1 


/'t; 


:z" 


10 


ECONOMIC  HISTORY. 


f\ 


illi 


8;       liin 


declares  those  neglected  lands  grantable  to  any  other  person, 
though  it  has  not,  perhaps,  been  very  strictly  executed,  has, 
however,  had  sonic  effect. 

Secondly,  in  Pennsylvania  there  is  no  right  of  primogeni- 
ture, and  lands,  like  movables,  are  divided  equally  among 
all  the  children  of  the  family.  In  three  of  the  provinces  of 
New  England  the  oldest  has  only  a  double  share,  as  in  the 
Mosaical  law.  Though  in  those  provinces,  therefore,  too 
great  a  quantity  of  land  should  sometimes  be  engrossed  by 
a  particular  individual,  it  is  likely,  in  the  course  of  a  gem*  a- 
tion  or  two,  to  be  sufticiently  divided  again.  In  the  omer 
English  colonies,  indeed,  the  right  of  primogeniture  takes 
place,  as  in  the  law  of  England.  But  in  all  the  English 
colonics  the  tenure  of  the  lands,  which  are  all  held  by  free 
socage,  facilitates  alienation,  and  the  grantee  of  any  exten- 
sive tract  of  land  generally  finds  it  for  his  interest  to  alien- 
ate, as  fast  as  he  can,  the  greater  part  of  it,  reserving  only 
a  small  quit-rent.  In  the  Spanish  and  Portuguese  colonies, 
what  is  called  the  right  of  Majorazzo^  takes  i)laco  in  the 
succession  of  all  those  great  estates  to  which  any  title  of 
honor  is  annexed.  Such  estates  go  all  to  one  person,  and 
are  in  effect  entailed  and  unalienable.  The  French  colonies, 
indeed,  arc  subject  to  the  custom  of  Paris,  which,  in  the  in- 
heritance of  land,  is  much  more  favorable  to  the  younger 
children  than  the  law  of  England.  But,  in  the  French  colo- 
nies, if  any  part  of  an  estate  held  by  the  noble  tenure  of 
chivalry  and  homage  is  alienated,  it  is  for  a  limited  time 
subject  to  the  right  of  redemption,  either  by  the  heir  of  the 
superior  or  by  the  heir  of  the  family;  and  all  the  largest 
estates  of  the  country  are  held  by  such  noble  tenures,  which 
necessarily  embarrass  alienation.  But  in  a  new  colony  a 
great  uncultivated  estate  is  likely  to  be  much  more  speedily 
divided  by  alienation  than  by  succession.  The  plenty  and 
cheapness  of  good  land,  it  has  already  been  observed,  are  the 
principal  causes  of  the  rapid  prosperity  of  new  colonies. 
The  engrossing  of  land,  in  effect,  destroys  this  plenty  and 
cheapness.     The  engrossing  of  uncultivated  land,  besides,  is 

^  Jus  Majoratus. 


COLONIAL  POLICY  OF  EUROPE. 


11 


the  greatest  obstruction  to  its  improvement.  But  the  labor 
that  is  employed  in  the  improvement  and  cultivation  of  land 
affords  the  greatest  and  most  valuable  produce  to  the  society. 
The  produce  of  labor  in  this  case  pays  not  only  its  own 
wages,  and  the  profit  of  the  stock  which  emjjloys  it,  but  the 
rent  of  the  laud  too  upon  which  it  is  employed.  The  labor 
of  the  English  colonists,  therefore,  being  more  employed  in 
the  improvement  and  cultivation  of  land,  is  likely  to  afford 
a  greater  and  more  valuable  produce  than  that  of  any  of 
the  other  three  nations,  which  by  the  engrossing  of  land  is 
more  or  less  diverted  toward  other  employments. 

Thirdly,  the  labor  of  the  English  colonists  is  not  only 
likely  to  afford  a  greater  and  more  valuable  produce,  but,  in 
consociucnce  of  the  moderation  of  their  taxes,  a  greater  pro- 
portion of  this  produce  belongs  to  themselves,  which  they 
may  store  up  and  employ  in  putting  into  motion  a  still  greater 
quantity  of  labor.  The  English  colonists  have  never  yet 
contributed  anything  towards  the  defence  of  the  mother  coun- 
try, or  towards  the  support  of  its  civil  government.  They 
themselves,  on  the  contrary,  have  hitherto  been  defended  al- 
most entirely  at  the  expense  of  the  mother  country.  But  the 
expense  of  fleets  and  armies  is  out  of  all  proportion  greater 
than  the  necessary  expense  of  civil  governmout.  The  ex- 
pense of  their  own  civil  government  has  always  been  very 
moderate.  It  has  generally  been  confined  to  what  was  neces- 
sary for  paying  competent  salaries  to  the  governor,  to  the 
judges,  and  to  some  other  officers  of  police,  and  for  main- 
taining a  few  of  the  most  useful  public  works.  The  expense 
of  the  civil  establishment  of  Massachusetts  Bay,  before  the 
commencement  of  the  present  disturbances,  used  to  ))o  but 
about  j£18,000  a  year;  that  of  New  Hampshire  and  Rhode 
Island,  £3,500  each;  that  of  Connecticut,  X4,000;  that  of 
New  York  and  Pennsylvania,  £4,500  each;  that  of  New 
Jersey,  £1,200;  that  of  Virginia  and  South  Carolina,  £8,000 
each.  The  civil  establishments  of  Nova  Scotia  and  Georgia 
are  partly  supported  by  an  annual  grant  of  Parliament. 
But  Nova  Scotia  pays,  besides,  about  £7,000  a  year  to- 
wards the  public  expenses  of  the  colony ;  and  Georgia  about 


wsmm 


12 


ECONOMIC  III  STORY. 


j£2,500  a  year.  All  the  different  civil  establishments  in 
North  America,  in  short,  exclusive  of  those  of  Maryland  and 
North  Carolina,  of  which  no  exact  account  has  been  {jfot,  did 
not,  before  the  commencement  of  the  present  disturbances, 
cost  the  inhabitants  al>ove  £04,700  a  year,  —  an  ever-memo- 
rable example  at  how  small  an  expense  three  millions  of 
people  may  not  only  be  governed,  but  well  governed.  The 
most  important  part  of  the  expense  of  government,  indeed, 
that  of  defence  and  i)rotection,  has  constantly  fallen  upon 
the  mother  country.  The  ceremonial,  too,  of  the  civil  gov- 
ernment in  the  colonies,  upon  the  reception  of  a  new  gov- 
ernor, upon  the  opening  of  a  new  assembly,  etc.,  though 
sufficiently  decent,  is  not  accompanied  with  any  expensive 
pomp  or  parade.  Their  ecclesiastical  government  is  con- 
ducted upon  a  plan  equally  frugal.  Tithes  are  unknown 
among  them;  and  their  clergy,  who  are  far  from  being 
numerous,  are  maintained  either  by  moderate  stipends,  or  by 
the  voluntary  contributions  of  the  i)eoi)lc.  The  power  of 
Spain  and  Portugal,  on  the  contrary,  derives  some  sujiport 
from  the  taxes  levied  upon  their  colonies.  France,  indeed, 
has  never  drawn  any  c(jnsiderable  revenue  from  its  colonics, 
the  taxes  which  it  levies  upon  them  being  generally  sjicnt 
among  them.  But  the  colony  government  of  all  these  three 
nations  is  conducted  upon  a  much  more  expensive  plan,  and 
is  accompanied  with  a  much  more  expensive  ceremonial.  The 
sums  spent  upon  the  reception  of  a  new  viceroy  of  Peru,  for 
example,  have  frequently  been  enormous.  Such  ceremonials 
are  not  only  real  taxes  paid  by  the  rich  colonists  upon  those 
particular  occasions,  but  they  serve  to  introduce  among  them 
the  habit  of  vanity  and  expense  npon  all  other  occasions. 
They  are  not  only  very  grievous  occasional  taxes,  but  they 
contribute  to  establish  perpetual  taxes  of  the  same  kind  still 
more  grievous,  — the  ruinous  taxes  of  private  luxury  and  ex- 
travagance. In  the  colonies  of  all  those  three  nations, 
too,  the  ecclesiastical  government  is  extremely  oppressive. 
Tithes  take  place  in  all  of  them,  and  are  levied  with  the 
utmost  rigor  in  those  of  Spain  and  Portugal.  All  of  them, 
besides,  are  oppressed  with  a  numerous  race  of  mendicant 


COLONIAL  POLICY  OF  EUROPE. 


18 


in 

and 
did 

CC8, 

mo- 

rt   of 

The 
Icod, 
upon 

gov- 

loiigh 
;usivc 
con- 
mown 
being 
or  by 
A- or  of 
.upport 
udocd, 
Ionics, 
spent 
three 
and 
The 
ru,  for 
nonials 
those 
o-  them 
asions. 
ut  they 
nd  still 
and  ex- 
ations, 
ressive. 
ith  the 
,f  them, 
ndicant 


m, 


n 


friars,  whose  beggary,  being  not  only  licensed  but  consecrated 
by  religion,  is  a  most  grievous  tax  upon  the  poor  people, 
who  are  most  carefully  taught  that  it  is  a  duty  to  give,  and 
a  very  great  sin  to  refuse  them  their  charity.  Over  and 
above  all  this,  the  clergy  are,  in  all  of  them,  the  greatest 
engrossers  of  land. 

Fourthly,  in  the  disposal  of  their  surjilus  produce,  or  of 
what  is  over  and  above  their  own  consumption,  the  English 
colonies  have  been  more  favored,  and  have  been  allowed  a 
more  extensive  nuirket,  than  those  of  any  other  European  na- 
tion. Every  European  luvtion  has  endeavored,  more  or  less, 
to  monopolize  to  itself  the  comUierco  of  its  colonicp,  and  uj)on 
that  account  has  prohibited  thu  sliips  of  foreign  nations  from 
trading  to  them,  and  has  prohibited  them  from  importing  Eu- 
rojjean  goods  from  any  foreign  nation.  But  the  manner  in 
which  this  monopoly  has  been  exercised  in  dill'erent  nations 
has  been  very  different. 

Some  nations  have  given  up  the  whole  commerce  of  their 
colonies  to  an  exclusive  company,  of  whom  the  colonics  were 
obliged  to  l)uy  all  such  European  goods  as  they  wanted,  and 
to  whom  they  were  obliged  to  sell  the  whole  of  their  own 
surplus  produce.  It  was  the  interest  of  the  company,  there- 
fore, not  only  to  sell  the  former  as  dear,  and  to  buy  the  latter 
as  cheap  as  possible,  but  to  buy  no  more  of  the  latter,  even 
at  this  low  price,  than  what  they  could  dispose  of  for  a  very 
high  price  in  Europe.  It  was  their  interest  not  only  to 
degrade  in  all  cases  the  value  of  the  surplus  produce  of  the 
colony,  but  in  many  cases  to  discourage  and  keep  down  the 
natural  increase  of  its  quantity.  Of  all  the  cxi)edients  that 
can  well  be  contrived  to  stunt  the  natural  growth  of  a  new 
colony,  that  of  an  exclusive  company  is  undoubtedly  the 
most  effectual.  This,  however,  has  been  the  policy  of  Hol- 
land, though  their  compan}',  in  the  course  of  the  present 
century,  has  given  up  in  many  respects  the  exertion  of  their 
exclusive  privilege.  This,  too,  was  the  policy  of  Denmark 
till  the  reign  of  the  late  king.  It  has  occasionally  been  the 
policy  of  France,  and  of  late,  since  1755,  after  it  had  been 
abandoned  by  all  other  nations  on  account  of  its  absurdity, 


14 


ECONOMIC  HISTORY. 


it  has  bccomo  the  policy  of  Portugal  with  regard  at  least  to 
two  of  the  principal  provinces  of  J3razil,  Pernumbuco  and 
Manmnon. 

Otlier  nations,  without  establishing  an  exclusive  company, 
have  confined  the  whole  connnerce  of  their  colonies  to  a  jtar- 
ticular  port  of  the  mother  country,  from  whence  no  ship  was 
allowed  to  sail  but  either  in  a  fleet,  and  at  a  particular  sea- 
son, or,  if  single,  in  consequence  of  a  particular  license, 
which  in  most  cases  was  very  well  j)aid  for.  This  policy 
oi)ened,  indeed,  the  tradi^  of  the  colonies  to  all  the  natives  of 
the  mother  country,  i)rovided  they  traded  from  the  projter  j)ort, 
at  the  proper  season,  and  in  the  ])roj)er  vessels.  IJut  as  all 
the  different  merchants  who  joined  their  stocks  in  order  to  fit 
out  those  licensed  vessels  would  find  it  for  their  interest  to 
act  in  concert,  the  trade  which  was  carried  on  in  this  manner 
would  necessarily  be  conducted  very  nearly  ujjon  the  same 
principles  as  that  of  an  exclusive  comjiany.  The  profit  of 
those  merchants  would  be  almost  equally  exorbitant  and  op- 
pressive. The  colonies  w^ould  be  ill  supplied  and  would  bo 
obliged  both  to  buy  very  dear  and  to  sell  very  cheap.  This, 
however,  till  within  these  few  years,  had  always  been  the  pol- 
icy of  Spain ;  and  the  price  of  all  Euro])can  goods,  accordingl}-, 
is  said  to  have  been  enormous  in  the  Spanish  West  Indies. 
At  Quito,  we  are  told  ))y  UUoa,  a  pound  of  iron  sold  for  about 
four  and  sixpence,  and  a  pound  of  steel  for  about  six  and  nine- 
pence  sterling.  But  it  is  chiefly  in  order  to  purchase  Euro- 
pean goods  that  the  colonies  part  with  their  own  produce. 
The  more,  therefore,  they  pay  for  the  one,  the  less  they  really 
get  for  the  other,  and  the  dearness  of  the  one  is  the  same  thing 
Avith  the  cheapness  of  the  other.  The  policy  of  Portugal  is 
in  this  respect  the  same  as  the  ancient  j)olicy  of  Spain,  with 
regard  to  all  its  colonies  except  Pernambuco  and  Jlarannon, 
and  with  regard  to  these  it  has  lately  adopted  a  still  worse. 

Other  nations  leave  the  trade  of  their  colonies  free  to  all 
their  sul)jects,  who  may  carry  it  on  from  all  the  different  ports 
of  the  mother  country,  and  who  have  occasion  for  no  other  li- 
cense than  the  common  dispatches  of  the  custom-house.  In 
this  case  the  number  and  dispersed  situation  of  the  different 


COLONIAL  POLICY  OF  EUROPE. 


16 


traders  render  it  impossible  for  them  to  enter  into  any  gen- 
eral coniltiimtion,  and  their  competition  is  stinicient  to  hinder 
them  from  making  very  exorbitant  profits.  Under  so  liberal  a 
policy  till!  colonies  are  enabled  both  to  sell  their  own  produce 
and  to  buy  tin;  goods  of  Europe  at  a  reasonable  price.  But 
since  th(!  dissoluticm  of  the  Plymouth  company,  when  our  col- 
onies were  but  in  their  infancy,  this  has  always  been  the  pol- 
icy of  Huglaiid.  It  has  generally  too  been  that  of  France,  and 
has  been  uniformly  so  since  the  dissolution  of  what,  in  Eng- 
land, is  connuonly  called  their  Mississippi  company.  The 
profits  of  the  trade,  therefore,  which  France  and  England 
carry  on  with  their  colonies,  though  no  doubt  somewhat 
higher  than  if  the  competition  was  free  to  all  other  naticma, 
arc,  however,  by  no  means  exorbitant;  and  the  price  of  Eu- 
ropean goods  accordingly  is  not  extravagantly  high  in  the 
greater  part  of  the  colonics  of  either  of  those  nations. 

In  the  exportation  of  their  own  surplus  produce  too,  it  is 
only  with  regard  to  certain  commodities  that  the  colonies  of 
Great  H;  "tain  are  confined  to  the  market  of  the  mother  coun- 
try, 'ily.  ^le  commodities,  having  been  enumerated  in  the  act 
of  navigation  and  in  some  other  subsequent  acts,  have  upon 
that  accoimt  been  called  enumerated  commodities.  The  rest 
are  called  non-enumerated;  and  may  be  exported  directly  to 
other  counties,  provided  it  is  in  British  or  Plantation  ships, 
of  whidi  the  owners  and  three  fourths  of  the  mariners  are 
British  sul)ject3. 

Among  the  non-enumerated  commodites  are  some  of  the 
most  important  productions  of  America  and  the  West  Indies: 
grain  of  all  sorts,  lumber,  salt  provisions,  fish,  sugar,  and 
rum. 

Grain  is  naturally  the  first  and  principal  object  of  the 
culture  of  all  new  colonies.  By  allowing  them  a  very  exten- 
sive market  for  it,  the  law  encourages  them  to  extend  this 
culture  much  beyond  the  consumption  of  a  thinly  inhabited 
country,  and  thus  to  provide  beforehand  an  ample  subsist- 
ence for  a  continually  increasing  population. 

In  a  country  quite  covered  with  wood,  where  timber  conse- 
quently is  of  little  or  no  value,  the  expense  of  clearing  the 


m 

y-vl 

i' 


wm 


mmm 


16 


ECONOMIC  HISTORY. 


ground  is  the  principal  obstacle  to  improvement.  By  allow- 
ing the  colonics  a  very  extensive  market  for  their  lumber,  the 
law  endeavors  to  facilitate  improvement  by  raising  the  price 
of  a  commodity  which  would  otherwise  be  of  little  value,  and. 
therel)}'  enabling  them  to  make  some  profit  of  what  would 
otherwise  be  mere  expense. 

In  a  country  neither  half-peopled  nor  half-cultivated,  cattle 
naturally  multiply  beyond  the  consumption  of  the  inhabi- 
tants, and  are  often  upon  that  account  of  little  or  no  value. 
But  it  is  necessary,  it  has  already  been  shown,  that  the  price 
of  cattle  should  bear  a  certain  proportion  to  that  of  corn 
before  the  greater  part  of  the  lands  of  any  country  can  be 
improved.  By  allowing  to  American  cattle,  in  all  shapes, 
dead  and  alive,  a  very  extensive  market,  the  law  endeavors  to 
raise  the  value  of  a  commodity  of  which  the  high  price  is  so 
very  essential  to  imj)rovement.  The  good  effects  of  this 
liberty,  however,  must  be  somewhat  diminished  by  the  4th 
of  George  III.,  c.  15,  which  puts  hides  and  skins  among  the 
enumerated  commodities,  and  thereby  tends  to  reduce  the 
valuation  of  American  cattle. 

To  increase  the  shipping  and  naval  power  of  Great 
Britain  by  the  extension  of  the  fisheries  of  our  colonies  is 
an  object  which  the  legislature  seems  to  have  had  almost 
constantly  in  view.  Those  fisheries  upon  this  account  have 
had  all  the  encouragoment  which  freedom  can  give  them,  and 
they  have  flourished  accordingly.  The  New  England  lishery 
in  particular  was,  before  the  late  disturbances,  one  of  the 
most  important,  perhaps,  in  the  world.  Tlie  whale-fishery, 
which,  notwithstanding  an  extravagant  bounty,  is  in  Cireat 
Britain  carried  on  to  so  little  purpose  that,  in  the  opinion 
of  ,  lany  people  (which  I  do  not,  however,  pretend  to  war- 
rant), tlie  whole  produce  does  not  much  exceed  the  value  of 
the  bounties  which  arc  annually  paid  for  it,  is  in  New  Eng- 
land carried  on  without  any  bounty  to  a  very  great  extent. 
Fish  is  one  of  the  principal  articles  with  which  the  North 
Amcriciins  trade  to  Spain,  Portugal,  and  the  Mediterranean. 

Sugar  was  originally  an  enumerated  commodity  which 
could  be  exported  only  to  Great  Britian.     But  in  1731,  upon 


COLONIAL  POLICY  OF  EUROPE. 


17 


the 


a  representation  of  the  sugar-planters,  its  exportation  was 
permitted  to  all  parts  of  the  world.  The  restrictions,  how- 
ever, with  which  this  liberty  was  granted,  joined  to  the  high 
])ricc  of  sugar  in  Great  Britain,  have  rendered  it  in  a  great 
measure  ineffectual.  Great  Britain  and  her  colonies  still 
continue  to  be  almost  the  sole  market  for  all  the  sugar  pro- 
duced in  the  British  plantations.  Their  consumption  in- 
creases so  fast  that,  though  in  conse([uencc  of  the  increasing 
improvement  of  Jamaica,  as  well  as  of  the  Ceded  Islands, 
the  importation  of  sugar  has  increased  very  greatly  within 
these  twenty  years,  the  exportation  to  foreign  countries  is 
said  to  be  not  much  greater  than  before. 

Rum  is  a  very  important  article  in  the  trade  which  the 
Americans  carry  on  to  the  coast  of  Africa,  from  which  they 
liring  back  negro  slaves  in  return. 

If  the  whole  sur{)lus  produce  of  America  in  grain  of  all 
sorts,  in  salt  provisions,  and  in  (ish,  had  been  })ut  into  the 
enumeration,  and  thereby  forced  into  the  market  of  Great 
Britain,  it  would  have  interfered  too  much  with  the  produce 
of  the  industry  of  our  own  people.  It  was  probal)ly  not  so 
much  from  any  regard  to  the  interest  of  America,  as  from 
a  jealousy  of  this  interference,  that  those  important  com- 
modities have  not  only  been  kept  out  of  the  enumeraticm, 
but  that  the  iuiportation  into  Great  Britain  of  all  grain,  ex- 
cept rice,  and  of  all  salt  provisions,  has,  in  the  onlinary 
state  of  the  law,  been  prohibited. 

The  non-enumerated  commodities  could  originally  be  ex- 
ported to  all  parts  of  the  world.  Lumber  and  rice,  hav- 
ing been  once  put  into  the  enumeration,  when  they  were 
afte.'wards  taken  out  of  it  were  confined,  as  to  the  European 
market,  to  the  countries  that  lie  south  of  Cajie  Finisterre. 
By  th(>  Gth  of  George  III.,  c.  52,  all  non-enumerated  com- 
modities were  subjected  to  the  like  restriction.  The  i)arts  of 
Europe  which  lie  south  of  Cape  Finisterre  are  not  manufac- 
turing countries,  and  we  were  less  jealous  of  the  colony  ships 
carrying  home  from  them  any  manufactures  which  could 
interfere  with  our  own. 

The  enumerated  commodities  are  of  two  sorts :  first,  such 


I? 


i- 

\ 


18 


ECONOMIC  HISTORY. 


■A  ! 

•H  i 


as  are  cither  the  peculiar  produce  of  America,  or  as  cannot 
be  produced,  or  at  least  are  not  produced,  in  the  mother 
country.  Of  this  kind  are  molasses,  coffee,  cocoanuts,  to- 
bacco, pimento,  ginger,  whale-fins,  raw  silk,  cotton-wool, 
beaver  and  other  peltry  of  America,  indigo,  fustic,  and 
other  dyeing  woods.  .Secondly,  such  as  are  not  the  peculiar 
produce  of  America,  but  which  are  Pi^l  may  J^e  produced  in 
the  mother  country,  though  not  in  such  quantities  as  to  suj)- 
ply  the  greater  part  of  her  demand,  which  is  i)rincipally  sup- 
plied ii'uni  foreign  countries.  Of  this  kind  are  all  naval 
stores,  masts,  yards,  and  bowsjjrits,  tar,  pitch,  and  turpen- 
tine, pig  and  bar  iron,  copper  ore,  hides  and  skins,  pot  and 
pearl  ashes.  The  largest  importation  of  commodities  of  the 
first  kind  could  not  discourage  the  growth  or  interfere  with 
the  sale  of  any  part  of  the  produce  of  the  mother  coimtry. 
By  confining  them  to  the  home  market,  our  merchants,  it 
was  expected,  would  not  only  be  enablerl  to  buy  them  cheaper 
in  the  Plantations,  and  consequently  to  sell  them  with  a 
better  i)rofit  at  home,  but  to  establish  between  the  Planta- 
tions and  foreign  countries  an  advantageous  carrying  trade, 
of  which  Great  Britain  was  necessarily  to  ])e  the  centre  or 
cm|)orium,  as  the  European  coimtry  into  which  those  com- 
modities were  first  to  be  imported.  The  importation  of 
commodities  of  the  second  kind  might  be  so  managed  too,  it 
was  sujtposcd,  as  to  interfere,  not  with  the  sale  of  those  of 
the  same  kind  which  were  produced  at  home,  but  with  that 
of  those  which  were  imported  from  foreign  countries;  be- 
cause, by  means  of  proper  duties,  they  might  be  rendered 
always  somewhat  dearer  than  the  former,  and  yet  a  good 
deal  cheaper  than  the  latter.  By  confining  such  connnod- 
ities  to  the  home  market,  therefore,  it  was  projiosed  to  dis- 
courage the  produce,  not  of  Great  Britain,  but  of  some 
foreign  countries  with  which  the  balance  of  trade  was  be- 
lieved to  be  unfavorable  to  Great  Britain. 

The  ])r()hibition  of  exporting  from  the  colonies  to  any 
other  country  but  Great  Britain  masts,  yards,  and  bow- 
sprits, tar,  pitch,  and  turpentine  naturally  tended  to  lower 
the  price  of  timber  in  the  colonies,  and  consequently  to  in- 


COLONIAL  POLICY  OF  EUROPE. 


19 


not 

;her 
to- 

ool, 

and 

iliar 

?d  in 

sup- 

sup- 

aaval 

vpcn- 

)t  and 

of  the 

3  -with 

untrj. 

ats,  it 

lieaper 

with  a 

manta- 

:  trade, 

ntrc  or 

^e  com- 

tion   of 
too,  it 

Aiose  of 

litli  tliat 
be- 

Icndcred 
a  good 

lommod- 
to  dis- 
if   some 
was  be- 
to  any 
jiid  bo-vr- 
Ito  lower 
lly  to  in- 


1 
■I 


crease  the  expense  of  clearing  their  Lands,  the  principal 
obstacle  to  their  improvement.  But  about  the  bcgiii-iing  of 
the  present  century,  in  1703,  the  pitch  and  tar  comi>any  of 
Sweden  endeavored  to  raise  the  price  of  their  commotlities 
to  Great  Britain  by  prohibiting  their  exportation,  except  in 
their  own  ships,  at  their  own  price,  and  in  such  (piantities  as 
they  thought  proper.  In  order  to  counteract  this  notable 
piece  of  mercantile  policy,  and  to  render  herself  as  much  as 
possible  independent,  not  only  of  Sweden,  but  of  all  the  other 
northern  powers.  Great  Britain  gave  a  bounty  upon  the  im- 
portation of  naval  stores  from  America,  and  the  effect  of 
this  bounty  was  to  raise  the  price  of  timber  in  America 
nuK'h  more  than  the  confinement  to  the  home  market  could 
lower  it;  and  as  both  regulations  were  enacted  at  the  same 
time,  their  joint  ef^'cct  was  rather  to  encourage  than  to  dis- 
courairc  the  clearing  of  land  in  America. 

Though  pig  and  bar  iron  too  have  been  put  among  the 
enumerated  commodities,  yet  as,  when  imjjortcd  from  Amer- 
ica, they  arc  exempted  from  considerable  duties  to  which 
they  arc  subject  when  imported  from  any  other  country,  the 
one  part  of  the  regulation  contriI)utes  more  to  encourage  the 
erection  of  furnaces  in  America,  than  the  other  to  discourage 
it.  There  is  no  manufacture  which  occasions  so  great  a  con- 
sumptiim  of  wood  as  a  furnace,  or  which  can  contril)ute  so 
much  to  the  clearing  of  a  country  overgrown  with  it. 

The  tendency  of  some  of  these  regulations  to  raise  the 
value  of  timber  in  America,  and  thereby  to  facilitate  the 
clearing  of  the  land,  was  neither,  perhaps,  intended  nor 
understood  I)y  the  legislature.  Though  their  beneficial 
effects,  however,  have  been  in  this  respect  accidental,  they 
have  not  upon  that  account  been  less  real. 

The  most  perfect  freedom  of  trade  is  permitted  between 
the  British  colonies  of  America  and  the  West  Indies,  l)oth 
in  the  enumerated  and  in  the  non-enumerated  commodities. 
Those  colonies  are  now  become  so  populous  and  thriving 
that  each  of  them  finds  in  some  of  the  others  a  great  aud  ex- 
tensive market  for  every  part  of  its  produce.  All  of  them 
taken  together,  they  make  a  great  internal  market  for  the 
produce  of  one  another. 


tr;i 


''''■\ 


; 


20  ECONOMIC  HISTORY. 

The  lil)(?rality  of  England,  however,  towards  the  trade  of 
her  colonies  has  been  confined  chiefly  to  what  concerns  the 
market  lor  their  produce,  either  in  its  rude  state,  or  in  what 
may  be  called  the  very  first  stage  of  manufacture.  The  more 
advanced  or  more  refined  manufactures  even  of  the  colony 
produce,  the  merchants  and  manufacturers  of  Great  Britain 
choose  to  reserve  to  themselves,  and  have  prevailed  upon  the 
legislature  to  prevent  their  establishment  in  the  colonies, 
sometimes  by  high  duties,  and  sometimes  by  absolute 
prohibitions. 

While,  for  example.  Muscovado  sugars  from  the  British 
jilautalions  pay  upon  imitortation  oiUy  G*-,  4*?.  the  hundred 
weight;  white  sugars  pay  £1,  Is.  li/.  ;  and  refined,  either 
double  or  single,  in  loaves,  £4,  2.'*.  5J.  ,f^.  When  those  high 
duties  were  imposed  Great  Britain  was  the  sole,  and  she 
still  continues  to  be  the  princijjal  niarket  to  which  the 
sugars  of  the  British  colonies  could  be  exported.  They 
amounted,  therefore,  to  a  prohibition,  at  first  of  claying  or 
refining  sugar  for  any  foreign  market,  and  at  present  of  clay- 
ing or  refining  it  for  the  market,  which  takes  off,  perhaps, 
more  than  nine  tenths  of  the  whole  produce.  The  manufac- 
ture of  claying  or  refining  sugar  accordingly,  though  it  has 
flom'ished  in  all  the  sugar  colonies  of  France,  has  been  little 
cultivated  in  any  of  those  of  Kna-land,  ex<'(>]it  for  the  market 
of  the  colonies  themselves.  While  Cirenad.i  was  in  the 
hands  of  the  French  there  was  a  refinery  of  si'irar,  by  clay- 
ing at  least,  upon  almost  every  plantati'Mi.  ^^ince  it  fell 
into  those  of  the  English,  almost  all  works  of  this  kind  have 
been  given  up,  and  tluMV  are  at  pres(>nt,  October.  177:5.  I  nni 
assured,  not  aliove  two  or  three  remainimi'  in  the  island.  At 
present,  however,  l)y  an  indulgence  of  the  custom-honse, 
clayed  or  refined  sugar,  if  reduced  from  loaves  into  pinMbr, 
is  commonly  iniport('(l  as  Muscovado. 

While  Great  [Jrilain  encourages  in  Ameiiea  the  manul'ac- 
tures  of  pig  and  bar  iron,  by  exemjiting  them  from  duties 
to  which  the  like  commodities  are  subjected  when  inijioi'ted 
from  any  other  country,  she  imjioses  an  absolute  ju-ohibition 
njion  the  erection  of  steel  furnaces  and  slit-mills  in  any  of 


1 


II 


COLONIAL  POLICY  OF  EUROPE. 


21 


dc  of 

IS  the 

what 

more 
colony 
Iritaiu 
on  the 
Ionics, 
ijsoUite 

r>iitish 

imulrocl 

,  oithcr 

)sehig-h 

and  she 

M-\\   the 
Thoy 

uyinsr  or 

:  (jf  clay- 

porhaps, 

nanufae- 
.•h  it  has 

ecu  little 
i«  niarkot 
s   m    the 

,  bv  clay- 

./it   fell 

viiid  have 

am 

At 

ilii-lioiisc, 

)  poWiliV, 

maiiiii'ae- 
oni  <lutie9 

iiui»oi'teci 
irohiMtion 

in  anv  of 


and 


her  American  plantations.  She  will  not  suffer  her  colonists 
to  work  in  those  more  refined  mainifacturos,  ovon  for  their 
own  consumption;  but  insists  upon  their  purchasing  of  her 
merchants  and  manufacturers  all  goods  o*'  this  kind  which 
they  have  occasion  for. 

She  prohibits  the  exportation  from  one  province  to  another 
by  water,  and  even  the  carriage  by  land  upon  horseljiick  or 
in  a  cart,  of  hats,  of  wools  and  woollen  goods,  of  the  produce 
of  America, — a  regulation  which  effectually  prevents  the 
establishment  of  any  manufacture  of  such  commodities  for 
distant  sale,  and  confines  the  industry  of  her  colonists  in 
this  way  to  such  coarse  and  household  manufactures  as  a 
private  lamily  commonly  makes  for  its  own  use,  or  for  that 
of  some  of  its  neighbors  in  the  same  province. 

To  prohibit  a  great  people,  however,  from  making  all  that 
they  can  of  every  part  of  their  own  produce,  or  from  employ- 
ing their  stock  and  industry  in  the  way  that  they  judge  most 
advantageous  to  themselves,  is  a  manifest  violation  of  the 
most  sacred  rights  of  mankind.  Unjust,  however,  as  such 
prohibitions  may  be,  they  have  not  hitherto  been  very  hurtful 
to  the  colonics.  Land  is  still  so  cheap,  and,  consequently, 
labor  so  dear  among  them,  that  they  can  import  from  the 
mother  country  almost  all  the  more  refined  or  more  advanced 
manufactures  cheaper  than  they  could  make  them  for  them- 
selves. Though  they  had  not,  therefore,  been  prohibited 
from  establishing  such  manufactures,  yet  in  their  present 
state  of  improvement  a  regard  to  their  own  interest  would, 
l»roljably,  have  prevented  them  from  doing  so.  In  their 
present  state  of  improvement  those  prohildtions,  perhaps, 
without  cramping  their  industry,  or  restraining  it  from  any 
employment  to  which  it  woidd  have  gone  of  its  own  accoril, 
are  only  impertinent  badges  of  slavery  imposed  upon  them, 
without  any  sufficient  reason,  by  the  groundless  jealousy  of 
the  merchants  and  manufacturers  of  the  mother  countr}'.  In 
a  more  advanced  state  they  might  be  really  oppressive  and 
insupportable. 

Great  Britain  too,  as  she  confines  to  her  own  market  some 
of  the  most  important  productions  of  the  colonies,   so  in 


H'; 


m 


22 


ECONOMIC  HISTORY. 


compensation  she  gives  to  sonic  of  tlioni  an  advantage  in  that 
nuirlcct ;  sometimes  by  imposing  higlier  duties  npon  the  like 
product ion.j  wlien  imported  from  other  countries,  and  some- 
times by  giving  bounties  upon  their  importation  from  the 
colonics.  In  the  first  way  she  gives  an  advantage  in  the 
home  market  to  the  sugar,  tobacco,  and  iron  of  her  own 
colonies,  and  in  the  second  to  their  raw  silk,  to  their  hemp 
and  flax,  to  their  indigo,  to  their  naval  stores,  and  to  their 
building-timber.  This  second  way  of  encouraging  the  colony 
produce,  by  bounties  upcm  importation,  is,  so  far  as  I  have 
been  able  to  learn,  peculiar  to  Great  Britain.  The  first  is 
not.  Portugal  docs  not  content  herself  with  imposing  higher 
duties  upon  the  importation  of  tobacco  from  any  other  coun- 
try, but  prohibits  it  under  the  severest  penalties. 

With  regard  to  the  im])ortation  of  goods  from  Europe, 
England  has  likewise  dealt  more  liberally  with  her  colonies 
than  any  other  nation. 

Great  Britain  allows  apart,  almost  always  the  half,  gener- 
ally a  larger  portion,  and  sometimes  the  whole  of  the  duty 
which  is  paid  upon  the  importation  of  foreign  goods,  to  bo 
drawn  back  u))on  their  exportation  to  any  foreign  country. 
No  independent  foreign  country,  it  was  easy  to  foresee,  would 
receive  them  if  they  came  to  it  loaded  with  the  heavy  duties 
to  which  almost  all  foreign  goods  arc  subjected  on  their  im- 
portation into  Great  Britain.  Unless,  therefore,  some  part 
of  those  duties  was  drawn  back  upon  exportation,  there  was 
an  end  of  the  carrying  trade,  —  a  trade  so  much  favored  by 
the  mercantile  system. 

Our  colonies,  however,  arc  by  no  means  independent  for- 
eign countries;  and  Great  Britain,  having  assumed  to  her- 
self the  exclusive  right  of  sui)plying  them  with  all  goods 
from  Europe,  might  have  forced  them  (in  the  same  manner 
as  other  countries  have  done  their  colonies)  to  receive  sucji 
goods  loaded  with  all  the  same  duties  which  they  paid  in  the 
mother  country.  But,  on  the  contrary,  till  1703,  the  same 
drawbacks  were  paid  ujjon  the  exportation  of  the  greater  part 
of  ''  !gn  goods  to  our  colonics  as  to  any  indci)endcnt  for- 
c;  51    c  im^cy.     In  1703,   indeed,   by  the  4th  of  George  III., 


COLONIAL  POLICY  OF  EUROPE. 


28 


c.  15,  this  indulgence  was  a  good  deal  abated,  and  it  was 
enacted,  "Tliat  no  part  of  the  duty  called  the  old  subsidy 
should  be  drawn  back  for  any  goods  of  the  growth,  produc- 
tion, or  nuuuifacture  of  Europe  or  the  East  Indies,  wliich 
should  be  exported  from  this  kingdom  to  any  British  colony 
or  )ilantation  in  America;  wines,  white  calicoes,  and  muslins 
excepted."  Before  this  law  many  dilTerent  sorts  of  foreign 
goods  might  have  been  bought  cheaper  in  the  plantations 
than  in  the  mother  country;  and  some  may  still. 

Of  the  greater  part  of  the  regulations  concerning  the 
colony  trade,  the  merchants  who  carry  it  on,  it  must  be  ob- 
served, have  been  the  prinei[)al  advisers.  We  must  not 
wonder,  therefore,  if,  in  the  greater  part  of  them,  their  in- 
terest has  been  more  considered  than  either  that  of  the 
colonies  or  that  of  the  mother  country.  Tn  fheir  exclusive 
privilege  of  su])plying  the  colonies  with  all  the  goods  wliicli 
they  wanted  from  Europe,  and  of  i)urchasing  all  such  parts 
of  their  sui-plus  jn'oducc  as  could  not  interfere  with  any  of 
the  trades  which  they  themselves  carried  on  at  home,  the  in- 
terest of  the  C(jlonies  was  sacrificed  to  the  interest  of  those 
merchants.  In  allowing  the  same  drawl)acks  up<m  the  re- 
exportation of  the  greater  part  of  Ein-opcnn  and  East  India 
goods  to  the  colonies,  as  upon  their  re-exportation  to  any 
independent  country,  the  interest  of  the  mother  country  was 
sacriliced  to  it,  even  according  to  the  mercantile  ideas  of 
that  interest.  It  was  for  the  interest  of  the  merchants  to  pay 
as  little  as  possible  for  the  foreign  goods  which  they  sent  to 
the  colonies,  and  consetiuently,  to  get  back  as  mueli  as  pos- 
sible of  the  duties  which  they  advanced  upon  their  importa- 
tion into  Great  Britain.  They  might  thereby  l)e  eiuibled  to 
sell  in  the  colonies,  either  the  same  quantity  of  goods  with 
a  greater  profit,  or  a  greater  quantity  with  the  same  i)rolit, 
and,  consequently,  to  gain  something  either  in  the  one  way 
or  the  other.  It  was  likewise  for  the  interest  of  the  colonies 
to  get  all  such  goods  as  cheap  and  in  as  great  abundance  as 
possible.  But  this  might  not  always  be  for  the  interest  of 
the  mother  country.  She  might  frequently  suffer  both  in 
her  revenue,  by  giving  back  a  great  part  of  the  duties  which 


m 


tmummmimmt 


24 


ECONOMIC  HISTORY. 


had  been  paid  upon  the  importation  of  such  goods;  and  in 
her  munuluctiux'S,  by  being  undersold  in  the  colony  market, 
in  conseciuencc  of  the  easy  terms  upon  which  foreign  manu- 
factures could  be  carried  thither  by  means  of  those  draw- 
backri.  The  progress  of  the  linen  manufacture  of  Great 
JJritaiu,  it  is  commonly  said,  has  been  a  good  deal  retarded 
by  the  drawbacks  ujjon  the  re-exportation  of  German  linen  to 
the  American  colonies. 

But  though  the  policy  of  Great  Britain  with  regard  to  the 
trade  of  her  colonies  has  been  dictated  by  the  same  mercan- 
tile spirit  as  that  of  other  nations,  it  has,  however,  upon  the 
whole,  been  less  illiberal  and  oppressive  than  that  of  any  of 
them. 

In  everything,  except  their  foreign  trade,  the  lil)erty  of 
the  English  colonists  to  manage  their  own  affairs  their  own 
way  is  complete.  It  is  in  every  resjject  equal  to  that  of 
their  fellow-citizens  at  home,  and  is  secured  in  the  same 
manner,  by  an  assembly  of  the  representatives  of  the  people, 
who  claim  the  sole  right  of  imposing  taxes  for  the  support  of 
the  colony  government.  The  authority  of  this  assembly 
overawes  the  executive  power,  and  neither  the  meanest  nor 
the  most  obnoxious  colonist,  as  long  as  he  obeys  the  law, 
has  anything  to  fear  from  the  resentment,  cither  of  the  gov- 
ernor, or  of  any  other  civil  or  military  olTiecr  in  the  province. 
The  colony  assemblies,  though,  like  the  house  of  commons  in 
England,  they  are  not  always  a  very  equal  rei)resentation  of 
the  people,  yet  they  approach  more  nearly  to  that  character ; 
and  as  the  executive  power  cither  has  not  the  means  to  cor- 
rii|;t  them,  or,  on  account  of  the  support  which  it  receives 
from  the  mother  country,  is  not  under  the  necessity  of  doing 
so,  they  arc  pcrha])S  in  general  more  influenced  l)y  the  incli- 
nations of  their  constituents.  The  councils,  which,  in  the 
colony  legislatures,  correspond  to  the  house  of  lords  in  Great 
Britain,  are  not  composed  of  an  hereditary  noliility.  In 
some  of  the  colonies,  as  in  three  of  the  governments  of  New 
England,  those  councils  arc  not  appointed  by  the  king,  but 
chosen  by  the  representatives  of  the  peopV.\  In  none  of  the 
English  colonies  is  there  any  hereditary  nobility.     In  all  of 


COLOyiAL  POLICY  OF  EUROPE. 


26 


thom,  indeed,  as  in  all  other  free  countries  the  descendant 
of  an  old  colony  family  is  more  respected  than  an  upstart  of 
equal  mt-rit  and  fortune;  but  he  is  only  more  respected,  and 
he  has  no  itrivileges  by  which  he  can  be  troublesome  to  his 
neighbors.  Ijcfore  the  comniencemeut  of  the,  present  dis- 
turbances, the  cohmy  assemblies  had  not  only  the  legislative, 
but  a  i)art  of  the  executive  power.  In  Connecticut  and 
Rhode  Island  they  elected  the  governor.  lu  the  other  colo- 
nies they  appointed  the  revenue  oflicers  who  collected  the 
taxes  imposed  I»y  those  rcs])ectivc  assemblies,  to  whom  those 
oflicei's  were  innnediately  responsible.  There  is  more  ecpial- 
ity,  therefore,  among  the  English  colonists  than  among  the 
inhaliitauls  of  the  mother  country.  Their  manners  are  moro 
republican,  and  their  governments,  those  of  three  of  the 
provinces  of  New  England  in  particular,  have  hitherto  been 
more  repul)lican  too. 

The  absolute  governments  of  Spain,  Portugal,  and  France, 
on  the  contrary,  take  place  in  their  colonies;  and  the  dis- 
cretionary jjowers  which  such  governments  commonly  dele- 
gate to  all  their  inferior  ofticers  are,  on  account  of  the  great 
distance,  naturally  exercised  there  with  more  than  ordinary 
violence.  Under  all  absolute  governments  there  is  more 
liberty  in  the  ca|iital  than  in  any  other  part  of  the  country. 
The  sovereign  himself  can  never  have  either  interest  or  in- 
clination to  ))ervert  the  order  of  justice,  or  to  oppi-ess  the 
great  body  of  the  people.  In  the  capital  his  ])resence  over- 
awes more  or  less  all  his  inferior  oHicers,  who  in  the  remoter 
provinces,  frcmi  whence  the  comjdaints  of  the  people  are  less 
likely  to  reach  him,  can  exercise  their  tyranny  with  much 
moro  safety.  But  the  European  colonies  in  America  are 
more  remote  than  the  most  distant  provinces  of  the  greatest 
empires  which  had  ever  been  known  before.  The  govern- 
ment of  the  English  colonies  is  perhaps  the  only  one  which, 
since  the  world  began,  could  give  perfect  security  to  the  in- 
habitants of  so  very  distant  a  province.  The  aduiinistration 
of  the  French  colonies,  however,  has  always  been  conducted 
with  more  gentleness  and  moderation  than  that  of  the  Span- 
ish and  Portuguese.     This  superiority  of  conduct  is  suitable 


m 


"i 


1  '« 


26 


ECONOMIC  IIISTOliY. 


both  to  tlio  cliariU'tcr  of  tin;  Fi'cnch  nation,  nnd  to  what 
lornis  th(!  rliiiriicfcr  oi  every  natinn,  tho  naliiro  ol'  their  gov- 
eriinieiit,  wliicli,  tlioiijih  arbitrary  and  vioh'iit  in  eoniparison 
with  that  of  (Jreat  Uritain,  is  h'<:;iil  and  free  in  comparison 
witli  those  of  Spain  and  I'ortngal. 

It  is  in  Ww  proj^ress  of  tlie  North  American  eohtnies,  how- 
ever, that  the  superiority  of  tho  Enjilisli  policy  ehieOy 
aj)j)ears.  The  [)ro^ress  of  the  sugar  cohniies  of  France  has 
been  at  kjast  ecjiial,  perliaps  sujterior,  to  that  of  the  greater 
part  of  those  of  EngUind ;  and  yet  tlie  sugar  ctdonies  of  Eng- 
land enjoy  a  free  govennncnt  nearly  of  tlin  same  kind  witli 
that  whidi  takes  place  in  lier  colonies  of  North  Auierica. 
But  the  sugar  colonies  of  France  are  not  discouraged,  like 
those  of  England,  from  refining  their  own  sugar;  and,  what 
is  of  still  greatei'  importance,  the  genius  of  their  government 
naturally  introduces  a  better  manag(>ment  of  their  negro 
slaves. 

In  all  Euro])ean  cohmies  the  culture  of  the  sugar-cane  is 
carried  on  by  ncgi-o  slaves.  The  constitution  of  those  who 
have  been  born  in  the  tem])erate  climate  of  Europe  could  not, 
it  is  su])posed,  support  the  labor  of  digging  the  ground  under 
the  burning  sun  of  the  West  Indies;  and  the  culture  of  the 
sugar-cane,  as  it  is  managt^d  at  present,  is  all  hand  labor, 
though,  in  the  opinion  of  many,  the  drill  i)lough  might  be 
intrcjduced  into  it  with  great  advantage.  IJut,  as  the  profit 
and  success  of  the  cultivation  which  is  carried  on  by  means 
of  cattle  depend  very  much  upon  the  good  management  of 
those  cattle,  so  the  profit  and  success  of  that  which  is  car- 
ried on  I)y  shives  nuist  depend  equally  upon  the  good  man- 
agement of  those  slaves;  and  in  the  good  management  of 
tlu'ir  slaves  the  French  planters,  I  think  it  is  generally 
allowed,  arc  superior  to  the  English.  The  law,  so  far  as  it 
gives  some  weak  protection  to  the  slave  against  the  violence 
of  his  master,  is  likely  to  be  better  executed  in  a  colony 
where  the  government  is  in  a  great  measure  arbitrary  than 
in  one  where  it  is  altogether  free.  In  every  country  where 
the  unfortmnite  law  of  slavery  is  established,  the  m.agistratc, 
when  he  protects  the  slave,  Intermeddles  in  some  measure  in 


COLONIAL  POLICY  OF  EUROPE. 


27 


auc  18 
n>  who 
id  not, 

unilor 

of  the 

Uibor, 

i-lit  be 
)r()fit 

ineiiuH 
ut  of 
s  car- 
man- 
cut  of 

ucrally 
r  as  it 
olcnoc 
colony 
•y  than 
where 
istratc, 

isuro  in 


,1 


the  mana,'};omont  of  the  private  property  of  the  maater;  and 
in  a  free  country,  wliere  the  master  is  pcM'haps  either  a  mem- 
ber of  tlie  colony  assembly  or  an  eleetor  of  such  a  member, 
he  ilarc  not  do  this  but  with  the  greatest  caution  and  circjun- 
spection.  The  respect  which  he  is  obliged  to  pay  to  the 
master  renders  it  more  dillicult  fcjr  him  to  protect  the  slave. 
Jjut  in  a  country  where  the  government  is  in  a  great  measure 
arliitrary,  wlierc  it  is  usual  for  the  magistrate  to  intermeddle 
even  in  the  management  of  the  private  j)roperty  of  individ- 
uals, and  to  send  them,  perhaps,  a  ktti'e  de  cachet  if  tbey  do 
not  manage  it  acc<jrding  to  his  liking,  it  is  mueh  easier  for 
him  to  give  some  protection  to  the  slave;  and  common  hu- 
manity naturally  disposes  him  to  do  so.  The  protection  of 
the  magistrate  renders  the  slave  less  contemptible  in  the 
eyes  of  his  master,  who  is  thereby  induced  to  ccmsider  him 
with  more  regard,  and  to  treat  him  with  more  gentleness, 
(jcntle  usage  renders  the  slave  not  only  more  faithful,  but 
more  intelligent,  and  therefore,  u\nm  a  double  account,  more 
useful.  lie  approaches  more  to  the  conditi(jn  of  a  free  ser- 
vant, and  may  possess  some  degree  of  integrity  ami  attach- 
ment to  his  master's  interest, —  virtues  which  fre(picutly 
belong  to  free  sei'vants,  but  which  never  can  belong  to  a 
slave  who  is  treatinl  as  slaves  commonly  are  in  countries 
where  the  master  is  perfectly  free  and  secure. 

That  the  condition  of  a  slave  is  better  under  an  arl)itrary 
than  under  a  free  government  is,  I  believe,  supported  by  the 
history  of  all  ages  and  nations.  In  the  Roman  history,  the 
first  time  we  read  of  the  magistrate  inter[)osing  to  protect 
the  slave  from  the  violence  of  his  mastei-  is  under  the  em- 
perors. When  Vedius  Pollio,  in  the  ])resence  of  Augustus, 
ordered  one  of  his  "slaves,  who  had  eommittiMl  a  slight  fault, 
t  >  be  cut  into  pieces,  and  thrown  into  his  fish-pond  in  order 
to  feed  his  fishes,  the  emperor  commanded  him,  Avith  indig- 
nation, to  emancipate  immediately,  not  only  that  slave,  but 
all  the  others  that  belonged  to  him.  Und(!r  the  republic  no 
magistrate  could  have  had  authority  enough  to  protect  the 
slave,  much  less  to  punish  the  master. 

The  stock,  it  is  to  be  observed,  which  has  improved  the 


I' 


28 


ECONOMIC  IIISTO/IY. 


»n<rnv  ('i)l(tuios  of  Friuicc,  particularly  the  groat  colony  of  St. 
Doiniii^o,  has  Itccii  raised  nlmortt  entirely  from  tlu;  >j;ra<liial 
iiu|)roveineiit  and  eiiltivation  of  those;  colonies.  It  has  iicen 
alnidsl  altoLictlier  the  produce  of  the  soil  and  of  the  indnslry 
of  the  eulonists,  or,  wiiat  conies  to  the  same  thinji',  the  prico 
of  (hat  produce,  gradually  acciuniilated  liy  ^ood  niana;i'enient, 
and  employed  in  raisinj?  a  still  greater  produce.  Ihit  tho 
stock  which  has  improved  and  cultivated  the  sugar  culonics 
of  Knuland  has,  a  great  part  of  it,  heen  sent  out  from  Eng- 
land, and  has  l)\  no  means  l)cen  altijgether  the  produce  of 
tlie  soil  and  industry  of  the  colonists.  The  prospei'ity  of  the 
Knglish  sugar  colonies  has  Ix'cn,  in  a  great  measure,  owing 
to  (he  great  riches  of  England,  of  which  a  part  has  over- 
flowed, if  one  may  say  so,  upon  those  colonies.  JJut  the 
pi'osperity  of  the  sugar  colonies  of  France  has  l)een  entirely 
owing  to  (he  good  conduct  of  the  colonists,  which  nnist  there- 
fore have  had  some  superiority  over  that  of  the  English;  and 
this  superiority  has  lieen  remarked  in  nothing  so  much  as  in 
the  good  management  of  their  slaves. 

Such  have  been  the  general  outlines  of  the  policy  of  the 
dilTerent  European  nations  with  regai'd  to  their  colonies. 

The  ijollcy  of  Europe,  therefore,  has  very  little  to  boast  of, 
either  in  the  original  establishment,  or,  so  far  as  concerns 
their  internal  government,  in  the  subsecpient  prosperity  of 
the  colonics  of  America. 

Folly  and  injustice  seem  to  have  been  the  principles  which 
presided  over  and  directed  the  first  jiroject  of  establishing 
those  colonies;  the  folly  of  hunting  after  gold  and  silver 
mines,  and  the  injustice  of  coveting  the  possession  of  a  coun- 
try whos(!  harmless  natives,  far  from  having  ever  injured  the 
jieople  of  Europe,  had  received  tin;  (irst  adventurers  with 
every  mark  of  kindness  and  hospitality. 

The  adventurers,  indeed,  who  formed  some  of  the  later 
establishments,  joined  to  the  chimerical  project  of  finding 
gold  and  silver  mines  other  motives  more  reasonal)le  and 
more  laudable;  but  even  these  motives  do  very  little  honor 
to  (he  policy  of  Europe. 

The  English  Puritans,  restrained  at  home,  fled  for  free- 


COLONIAL  POLICY  OF  EUROPE. 


29 


riiiin  t(t  Aincricu,  iiiid  fstuhlishcd  tlioro  the  four  govcriinicuts 
of  New  Kiiuliind.  The  Kurdish  Cutliolios,  troatetl  with  much 
urcntcr  iujusficc,  t'Htahlishcd  lluit  of  Maryhiud;  thi;  Quiikcrs, 
that  of  IV'UUsylvauhi.  Tho  I'ortiitrur.so  Ji'WH,  ixTst'ciilcd  by 
the  Iminisitioii,  sli'Ippod  of  their  fortuucs,  and  liaiiishcd  to 
IJrazil,  iiitrodiK'cd,  by  their  cxauiidc,  Home  .sort  of  oidcr 
iiud  in(hislry  aujou'i  the  tranaportcd  ftdous  and  Htruui|K'ts, 
liy  wlioiu  that  colony  was  oriu;iually  peopled,  aud  tauizlit 
them  th(^  culture  of  the  sui^ar-caue.  L'pou  all  these  diifer- 
eut  occasions,  it  was,  not  the  wisdom  and  policy,  liut  the 
disordei'  and  injustice,  of  the  Hiiropeau  governments,  which 
pcopleil  and  cultivated  America. 

Ill  elfecttuitim;  some  of  tlie  most  important  of  tliese  estah- 
lishmeuts,  the  diil'erent  governments  of  Kurope  had  as  little 
niei'it  as  in  projecting!:  them.  The  conipiest  of  Mexico  was 
the  jiroji'ct,  not  of  the  council  of  Spain,  l)ut  of  a  ji'ovenior  of 
Cuba  ;  aud  it  was  otfoctuated  hy  the  spirit  of  the  bold  adven- 
turer to  whom  it  was  entrusted,  in  sjuto  of  cvorythin,L>;  which 
that  u'overnor,  who  soon  re])ented  of  havin;^  trusted  such  a 
person,  could  do  to  thwart  it.  Tlu;  compiei-ors  of  Chili  aud 
Peru,  and  of  almost  all  the  other  Spanisli  settlements  upon 
tlio  eimlincnt  of  America,  carried  out  with  them  no  other 
pul)lie  eui'iinrairement,  but  a  general  permission  to  make 
settlements  and  compu-sts  in  the  name  of  the  king  of  Spain. 
Those  adventures  were  all  at  the  private  risk  and  expense 
of  the  adventurers.  The  government  of  Spain  contril»uted 
scarce  anything  to  any  of  tluMu.  That  of  England  eontriit- 
uted  as  little  towards  effectuating  the  establishment  of  some 
of  its  most  important  colonies  in  Xorth  America. 

When  thoS(!  establishments  were  eii'ectuated,  and  had  be- 
come so  considerable  as  to  attract  the  attention  of  the  mother 
counti'v,  the  lii'st  regulations  wliich  she  made  with  i-egard  to 
them  hail  always  in  view  to  secure  to  hei'sclf  the  monopoly  of 
their  commerce, —  to  confine  their  market,  and  to  enlai'ge  \\ov 
own  at  their  expense,  anil,  conseipu>ntly,  rather  to  damp  aud 
discourage,  than  to  (juicken  and  forward,  the  course  of  their 
prosperity.  In  the  different  ways  in  Avhich  this  monojioly 
has  been  exercised,  consists  one  of  the  most  essential  difl'er- 


,'yi 


m 


.«;■! 


m 


30 


ECONOMIC  HISTORY. 


cnccs  in  the  policy  of  the  different  European  nations  with 
regard  to  their  colonies.  The  hest  of  them  all,  that  of  Eng- 
land, is  only  somewhat  less  illiberal  and  oppressive  than 
that  of  any  of  the  rest. 

In  what  way,  therefore,  has  the  policy  of  Europe  contrib- 
uted either  to  the  first  establishment  or  to  the  present 
grandeur  of  the  colonies  of  America?  In  one  way,  and  in 
one  way  only,  it  has  contributed  a  good  deal.  Mcvjna  virum 
Mater!  It  bred  and  formed  the  men  who  were  capable  of 
achieving  such  great  actions,  and  of  laying  the  foundation  of 
so  great  an  empire;  and  there  is  no  other  quarter  of  the 
world  of  which  the  policy  is  capable  of  forming,  or  has  ever 
actually  and  in  fact  formed,  such  men.  The  colonies  owe  to 
the  policy  of  Europe  the  education  and  great  views  of  their 
active  and  enterprising  founders;  and  some  of  the  greatest 
and  most  important  of  them,  so  far  as  concerns  their  internal 
government,  owe  to  it  scarce  anything  else. 


THE  GREAT  INVENTIONS. 


31 


II. 


THE  GREAT  INVENTIONS. 


From  Walpole's  Histouy  of  England,^  Vol.  I.    pp.  50-76. 


THE  manufacturing  industries  of  the  country  had  never 
previously  experienced  so  marvellous  a  devel()i)uient. 
The  hum  of  the  workshop  was  heard  in  [)laccs  which  had  pre- 
viously only  been  disturbed  by  the  whirr  of  the  grouse;  and 
new  forces,  undreamed  of  a  century  before,  were  employed  to 
assist  the  progress  of  production.  The  trade  of  the  United 
Kingdom  accpiired  an  importance  which  it  had  never  pre- 
viously enjoyed,  and  the  manufacturing  classes  ol)tained  an 
influence  which  they  had  never  before  known.  The  land- 
owners were  slowly  losing  the  monopoly  of  power  which  they 
had  enjoyed  for  centuries.  Ti-aders  and  manufacturers  werf 
dailv  obtaining  fresh  wealth  and  influence.  A  new  England 
was  supplanting  the  old  country;  and  agriculture,  the  sole 
business  of  our  forefathers,  was  gradually  Ijecoming  of  less 
importance  than  trade.  In  1703,  the  first  year  of  the  war, 
the  odicial  value  of  all  the  imports  into  Britain  was  less  than 
£20,000,000.  In  ISlo,  the  year  of  Waterloo,  it  exceeded 
£31,000,000.  In  1702  the  oriicial  value  of  Hritish  and  Irish 
exports  was  only  £18,000,000 ;  it  rose  in  181;")  to  £41,000,000. 
The  ollicial  values,  however,  give  only  a  very  imperf(M^t  idea  of 
the  extent  of  our  export  trade.  They  are  based  on  ])rices  fixed 
so  far  back  as  lOOG,  and  afford,  therefore,  an  inaccurate  test 
of  the  extent  of  our  trade.  No  attem|)t  was  made  to  ascertain 
the  declared  or  real  value  of  the  exports  till  tlu^  year  1708, 
when  it  slightly  exceeded  £33,000,000.  Tlic  d.'cliin'd  value 
of  the  exports  of  British  and  Irisli  produce  in  ISlo  exceeded 
£40,000,000.  Tlie  rise  in  the  value  of  the  exports  and  im- 
ports was  attril)utal)le  to  many  causes.     The  predominance 

1  London :  Longmans,  Green,  &  Co.,  1878. 


'  i 


i 


32 


ECONOMIC  HISTORY. 


1 


of  the  British  at  sea  had  driven  every  enemy  from  the  ocean, 
and  had  cnaljled  British  merchants  to  i)ly  their  trade  in 
coni])arative  safety.  Tlie  numerous  possessions  wliirh  the 
Britisli  liad  accpiired  in  every  quarter  of  the  globe  had  pro- 
vided llicm  with  customers  in  all  i)arts  of  the  Avui'Id;  and 
the  most  civilized,  as  well  as  the  most  savage,  of  nations 
were  purchasing  the  produce  of  the  looms  of  Manchester  and 
i)i  the  factories  of  Birmingham.  Even  the  taxation  which  the 
war  had  necessitated  had  stimulated  the  manufacturers  to 
fresh  exertions.  The  merchants  were  continually  discover- 
ing fresh  outlets  for  British  trade;  the  manufacturers  were 
constantly  encouraged  to  increase  their  produce.^ 

Wool  was  the  most  ancient  and  most  important  of  English 
manufactures.  Custom  seemed  to  ])oint  to  the  permanent 
superiority  of  the  woollen  trade.  Tlic  Chancellor  of  Eng- 
land sat  on  a  sack  of  wool ;  and  when  men  sp(jkc  of  the 
staple  trade,  they  always  referred  to  the  trade  in  wool.  For 
centuries  Britisli  sovereigns  and  British  statesmen  had,  after 
their  own  fashion,  and  according  to  their  own  ideas,  actively 
promoted  this  particular  industry.  Edward  III.  liiid  induced 
Flemish  weavers  to  settle  in  this  country.  The  Restoration 
Parliament  prohibited  the  exportation  of  British  wool,  and 
had  ordered  that  the  very  dead  should  he  interred  in  woollen 
shrouds.  The  maiuifacturers  spread  over  the  entire  king- 
dom. Wherever  there  was  a  running  stream  to  turn  their 
mill,  there  was  at  any  rate  the  possibility  of  a  woollen  fac- 
tory. Xorwieli,  with  its  contiguous  village  of  ^Volstl'(|,  was 
the  chief  seat  of  the  trade.  But  York  and  Bradford.  Worces- 
tershire and  (Iloucestershire,  Manchester  and  Kendal,  were 
larg(dy  depeiideiit  on   it. 

The  steps  wliieh  Farliament  took  to  promote  this  particu- 
lar imlustry  were  not  always  very  wise;  in  one  point  they 
were  not  veiy  just.  Ireland,  in  many  resix'cls,  could  have 
comjieted  u\\  advantageous  terms  with  the  woollen  manufac- 
tui'ers  of  England.      English   jealousy   i)rohibiteil   in   eonse- 


1  .Mcriillocirs  "  {\)mniprt'ial  Dicrtionary,"  imports  ami  I'xpnrts  ;  cf .,  liowovcr, 
Portt'r's  "  I'rosiress  i)f  tlio  Nation,"  p.  357,  wliero  tlie  figuri's  arc  sliglilly  differ- 
ent.    Nothing  IS  more  ditfluult  tlian  to  ascertain  the  correct  figures. 


THE  GREAT  INVENTIONS. 


88 


qiience  the  importation  of  Irish  manufactured  woollen  goods. 
The  result  hardly  answered  the  sanguine  anticipations  of  the 
selfish  senators  who  had  secured  it.  The  Irish,  instead  of 
sending  their  fleeces  to  be  worked  up  in  Great  Britain, 
smuggled  them,  in  return  for  contraband  spirits,  to  France. 
England  failed  to  obtain  any  large  addition  to  her  raw  mate- 
rial; and  Ireland  was  driven  into  closer  comrauiiication  with 
the  hereditary  foe  of  England.  The  loss  of  the  Irish  fleeces 
was  the  more  serious  from  another  cause.  The  home  supply 
of  wool  had  originally  been  abundant  and  good;  but  its  pro- 
duction, at  the  commencement  of  the  century,  was  not  in- 
creasing as  rapidly  as  the  demand  for  it;  the  quality  of 
home-grown  wool  was  rapidly  deteriorating.  The  same 
sheep  do  not  produce  both  wool  and  mutton  in  the  greatest 
perfection.  Every  improvement  in  their  meat  is  efi'ectcd  at 
the  cost  of  their  fleece.  English  mutton  was  better  than  it 
had  ever  been;  but  English  manufacturers  were  com^jelled  to 
mix  foreign  with  native  wool.  Had  trade  been  free  this 
result  would  have  been  of  little  moment.  The  English  could 
have  easily  oljtained  an  ample  supply  of  raw  material  from 
the  hills  of  .S|)ain  and  other  countries.  But,  at  the  very 
time  at  which  foreign  wool  became  indispensable,  the  necessi- 
ties of  the  country,  or  the  ignorance  of  her  financiers,  led  to 
the  imposition  of  aheavy  import  duty  on  wool.  Addington, 
in  1802,  levied  a  duty  upon  it  of  bs.  3(i.  the  cwt.  ;  Yansittart, 
in  1813,  raised  the  tax  to  Gs.  %d.  The  folly  of  the  protec- 
tionists hud  done  much  to  ruin  the  wool  trade.  But  the  evil 
already  done  was  small  in  comparison  with  that  in  store. 

Notwithstanding,  however,  the  restricticms  on  the  wool 
trade,  the  woollen  industry  was  of  great  importance.  In 
1800,  Law,  as  counsel  to  the  manufacturers,  declared,  in  an 
address  to  the  house  of  lortls,  that  600,000  packs  of  wool, 
worth  £6,600,000  were  produced  annually  in  England  and 
Wales,  and  that  1,500,000  persons  were  em|)loyed  in  the 
manufacture.  But  these  figures,  as  McCulloch  has  shown, 
are  undoubtedly  great   exaggerations.^     Rather   more   than 


1  McCulloch,  ad  verb.  Wool ;  Porter's  "  Progress  of  the  Nation,"  pp.  170- 


175. 


8 


84 


ECONOMIC  HISTORY. 


400,000  packs  of  wool  were  available  for  manufacturing  pur- 
poses at  the  commencement  of  the  century ;  more  than  nine 
tcntlie  of  these  were  produced  at  home;  and  some  350,000 
or  400,000  persons  were  probably  employed  in  the  trade. 
The  great  woollen  industry  still  deserved  the  name  of  our 
staple  trade;  but  it  did  not  merit  the  exaggerated  descrip- 
tions which  persons  who  should  have  known  better  applied 
to  it. 

If  the  staple  trade  of  the  country  had  originally  been  in 
woollen  goods  at  the  commencement  of  the  present  century, 
cotton  was  rapidly  gaining  upon  wool.  Cotton  had  been 
used  in  the  extreme  East  and  in  the  extreme  West  from  the 
earliest  periods  of  which  we  have  any  records.  The  Span- 
iards, on  their  discovery  of  America,  found  the  Alexicans 
clothed  in  cotton.  "There  are  trees,"  Herodotus  had  writ- 
ten, nearly  two  thousand  years  before,  "which  grow  wild 
there  [in  India],  the  fruit  whereof  is  a  wool  exceeding  in 
beauty  and  goodness  that  of  sheep.  The  natives  make  their 
clothes  of  this  tree  wool. "  ^  But  though  the  use  of  cotton 
had  been  known  from  the  earliest  ages,  both  in  India  and 
America,  no  cotton  goods  were  imported  into  Europe;  and 
in  the  ancient  world  both  rich  and  poor  were  clothed  in  silk, 
linen,  and  wool.  The  industrious  Moors  introduced  cotton 
iijto  Spain.  Many  centuries  afterwards  cotton  was  imported 
into  Italy,  Saxony,  and  the  Low  Countries.  Isolated  from 
the  rest  of  Europe,  with  little  wealth,  little  industrj-,  and  no 
roads;  rent  Ijy  civil  commotions,  — the  English  were  the  last 
people  in  Eiu'ope  to  introduce  the  manufacture  of  cotton 
goods  into  their  own  homes. 

Towards  the  close  of  the  sixteenth  century,  indeed,  cotton 
goods  were  occasionally  mentioned  in  the  statute  book,  and 
the  manufacture  of  the  cottons  of  Manchester  was  regulated 
by  acts  passed  in  the  reigns  of  Henry  VIII. ,  Edward  VI., 
and  Elizabeth.  But  there  seem  to  be  good  reasons  for  con- 
cluding that  Manchester  cottons,  in  the  time  of  the  Tudors, 
were  woollen  goods,  and  did  not  consist  of  cotton   at  all. 

1  Rawlinson's  "  Herodotus,"  vol.  ii.  p.  411.  The  German  name  for  cotton  is 
BaumwoUe  —  tree  wool. 


THE  GREAT  INVENTIONS. 


35 


rpur- 
i  nine 
iO,00© 
trade. 
3f  our 
!scrip- 
pplicd 

ccn  in 
■ntury, 
1  been 
om  the 
Span- 
,'xicans 
d  -svrit- 
w  Avild 
ding  in 
ce  their 
:  cotton 
dia  and 


pe; 


and 


in  silk, 

cotton 

nportcd 

d  from 

and  no 

the  last 

cotton 

cotton 
l)()k,  and 
,'gulatcd 
id  VI., 
Il'or  con- 
IXudors, 
at  all. 

cotton  is 


More  than  a  century  elapsed  before  any  considerable  trade  in 
cotton  attracted  the  attention  of  the  legislature.  The  woollen 
miinufacturers  comj^lainod  that  people  were  dressing  their 
cliildren  in  printed  cottons;  and  Parliament  was  actually 
persuaded  to  prohibit  the  introduction  of  Indian  printed 
calicoes.  Even  an  act  of  Parliament,  however,  was  unable 
to  extinguish  the  growing  taste  for  Indian  cottons.  The 
ladies,  according  to  the  complaint  of  an  old  writer,  expected 
"to  do  what  they  please,  to  say  what  they  i)lease,  and  wear 
what  they  please. "  The  taste  for  cotton  led  to  the  introduc- 
tion of  calico-printing  in  London;  Parliament,  in  order  to 
encourage  the  new  trade,  was  induced  to  sanction  the  imj)or- 
tation  of  filain  cotton  cloths  from  India  under  a  duty.  The 
demand  which  was  thus  created  for  calicoes  probably  pro- 
moted their  manufacture  at  home;  and  Manchester,  Bolton, 
Frome,  and  other  i)laces,  gradually  acquired  fresh  vitality 
from  the  creation  of  a  new  industry. 

Many  years,  however,  passed  before  the  trade  attained 
anything  but  the  slenderest  proporticms.  In  the  year  1G97 
only  1,976,359  pounds  of  cotton  wool  were  imported  into  the 
United  Kingdom.  In  the  year  1751  only  2,976,610  j)ounds 
were  imported.  The  official  value  of  cotton  goods  exported 
amounted  in  the  former  year  to  only  .£5,915;  iu  the  latter 
year  to  only  £4.5,986.  At  the  present  time  Britain  annually 
purchases  about  1,500,000,000  pounds  of  cotton  wool.  She 
annually  disposes  of  cotton  goods  worth  £60,000,000.  The 
import  trade  is  five  hundred  times  as  large  as  it  was  in 
1751;  the  value  of  the  exports  has  been  increased  1,300  fold. 
The  world  has  never  seen,  in  any  similar  period,  so  prodi- 
gious a  growth  of  manufacturing  industry.  But  the  trade 
has  not  merely  grown  from  an  infant  into  a  giant;  its  con- 
ditions have  been  concurrently  revoluti(mized.  Up  to  the 
middle  of  the  last  century  cotton  goods  were  really  never 
made  at  all.  The  so-called  cotton  manufactures  were  a 
coml)inati(m  of  wool,  or  linen,  and  cotton.  Xo  Englislnnan 
had  been  ahlo  to  produce  a  cotton  thread  strong  enough  for 
the  warp;  and  even  the  cotton  manufacturers  themselves 
appear  to  have  despaired  of  doing  so.     They  induced  Parlia- 


mm 


l  w 


86 


ECONOMIC  HISTORY. 


mcnt  in  1736  to  repeal  the  prohibition  which  still  encum- 
bered the  statute  book,  ajrainst  wcarinj?  printed  calicoes ; 
but  the  repeal  was  granted  on  the  curif))i8  condition  "that 
the  warp  thereof  be  entirely  linen  yarn."  Parliament  no 
doubt  intended  by  this  condition  to  check  the  importation  of 
Indian  goods  without  interfering  with  the  home  manufac- 
turers. The  superior  skill  of  the  Indian  manufacturers 
cnal)led  them  to  use  cotton  for  a  warp;  while  clumsy  work- 
manship made  the  use  of  cotton  as  a  warp  unattainable  at 
home. 

In  the  middle  of  the  eighteenth  century,  then,  a  piece  of 
cotton  cloth,  in  the  true  sense  of  the  term,  had  never  been 
made  in  England.  The  so-called  cotton  goods  were  all  made 
in  the  cottages  of  the  weavers.  The  yarn  was  carded  by 
hand;  it  was  sinin  by  hfind,  it  was  worked  into  cloth  by  a 
hand-loom.  The  weavi. i  was  ■-'uaily  the  head  of  the  family; 
his  wife  and  unmarried  ('ir  i.  '  s  spun  the  yarn  for  him. 
Spinning  was  the  ordinary  occupation  of  every  girl,  and  the 
distaff  was,  for  countless  'enturies,  the  ordinary  occupation 
of  every  woman.  The  oceupau  m  \\i\-a  ho  nni'ersal  that  the 
distaff  was  occasionally  used  as  a  .^ynuiiun  for  woman. 
"Le  royaume  de  France  nc  tombe  point  en  qiienouille." 

"  See  my  royal  master  murdered, 
Ilis  crown  usurped,  a  dUuiff  in  the  throne." 

To  this  day  every  unmarried  girl  is  commonly  described  as 
a  "  spinster. " 

The  operation  of  weaving  was,  however,  much  more  rapid 
than  that  of  spinning.  The  Aveaver  consumed  more  weft 
than  his  own  family  could  supply  him  with;  and  the  weavers 
generally  experienced  the  greatest  difViculty  in  obtaining 
sulheient  yarn.  About  the  middle  of  the  eighteenth  century 
the  ingenuity  of  two  persons,  a  father  and  a  son,  made  this 
difference  more  apparent.  The  shuttle  had  originally  been 
thrown  by  the  hand  from  one  end  of  the  loom  to  the  other. 
John  Kay,  a  native  of  Bury,  by  his  invention  of  the  fly- 
shuttle,  saved  the  weaver  from  this  labor.  The  lathe  in 
which  the  shuttle  runs  was  lengthened  at  both  ends;   two 


THE  GREAT  INVENTIONS. 


37 


•ibed  as 


strings  were  attached  to  its  opposite  ends ;  the  strings  were 
lield  by  a  peg  in  the  weaver's  hands,  and  by  plucking  the 
peg  the  weaver  was  enabled  to  give  the  necessary  impulse 
to  the  shuttle.  Robert  Ka}',  John  Kay's  son,  added  the 
drop-box,  by  means  of  which  the  weaver  was  able  "to  use 
any  one  of  the  three  shuttles,  each  containing  a  different 
colored  weft,  without  the  trouble  of  taking  them  from  and 
rejjlacing  them  in  the  lathe."  By  means  of  these  inventions 
the  productive  power  of  each  weaver  was  doubled.  Each 
weaver  was  easily  able  to  perform  the  amount  of  work  which 
had  previously  required  two  men  to  do;  and  the  spinsters 
found  themselves  more  hopelessly  distanced  than  ever  in 
their  efforts  to  sui)ply  the  weavers  with  weft. 

The  preparation  of  weft  was  entirely  accomplished  by 
manual  labor,  and  the  process  was  very  complicated.  Card- 
ing and  roving  were  both  slowly  performed  with  the  aid  of 
the  clumsy  implements  which  had  originally  been  invented 
for  the  purpose.  "Carding  is  the  process  to  which  the 
cotton  is  subjected  after  it  has  been  opened  and  cleaned, 
in  order  that  the  fibres  of  the  wool  may  be  disentangled, 
straightened,  and  laid  parallel  with  each  other,  so  as  to  ad- 
mit of  being  spun.  This  was  formerly  effected  by  instru- 
ments called  hand-cards,  which  were  brushes  made  of  short 
pieces  of  wire  instead  of  bristles,  the  wires  being  stuck  into 
a  sheet  of  leather  at  a  certain  angle,  and  the  leather  fast- 
ened on  a  flat  piece  of  wood  about  twelve  inches  long  and 
five  wide,  with  a  handle.  The  cotton  being  spread  upon  one 
of  the  cards,  it  was  repeatedly  combed  with  another  till  all 
the  fibres  were  laid  straight,  when  it  was  stripped  off  the 
card  in  a  fleecy  roll  ready  for  the  rover.  In  'roving'  the 
spinner  took  the  short  fleecy  rolls  in  which  the  cotton  was 
stri|)ped  off  the  hand-cards,  applied  them  successively  to  the 
spindle,  and  while  with  one  hand  she  turned  the  wheel  and 
thus  made  the  spindle  revolve,  with  the  other  she  drew  out 
the  cardings,  which,  receiving  a  slight  twist  from  the  spin- 
dle, were  made  into  thick  threads  called  rovings,  and  wound 
upon  the  spindle  so  as  to  form  cops."  In  spinning,  "the 
roving  was  spun  into  yarn;  the  operation  was  similar,  but 


:§ 


m 


38 


ECONOMIC  HISTORY. 


ill     >■ 


i  m\m 


1 1 


the  thread  was  drawn  out  luuch  finer  and  received  much 
more  twist.  It  will  be  seen  that  this  instrument  only  ad- 
mitted of  one  thread  being  spun  at  a  time  by  one  pair  of 
iiands,  and  the  slowness  of  the  operation  and  consequent 
expensiveness  of  the  yarn  formed  a  great  obstacle  to  the 
I'stablishment  of  a  new  manufacture." 

The  trade  was  in  this  humble  and  primitive  state  when  a 
series  of  extraordinary  and  unparalleled  inventions  revolu- 
tionized the  conditions  on  which  cotton  had  been  hitherto 
prepared.  A  little  more  than  a  century  ago  John  Ilar- 
greaves,  a  poor  weaver  in  the  neighborhood  of  Blackburn, 
was  returning  home  from  a  long  walk  in  which  he  had  been 
purchasing  a  further  supply  of  yarn  for  his  loom.  As  he 
(mtered  his  cottage,  his  wife  Jenny  accidentally  upset  the 
spindle  which  she  was  using,  llargreaves  noticed  that  the 
spindles,  which  were  now  thrown  into  an  upright  position, 
continued  to  revolve,  and  that  the  thread  was  still  spinning 
in  his  wife's  hand.  The  idea  immediately  occurred  to  him 
that  it  would  be  possible  to  connect  a  considerable  number 
of  upright  si)indles  with  one  wheel,  and  thus  multiply  the 
productive  power  of  each  si)inster.  "He  contrived  a  frame, 
in  one  part  of  which  he  placed  eight  rovings  in  a  row,  and 
in  another  ])art  a  row  of  eight  spindles.  The  rovings,  when 
extended  to  the  spindles  passed  between  two  horizontal  bars 
of  wood,  foi'ming  a  clasp  which  opened  and  shut  somewhat 
like  a  parallel  ruler.  When  pressed  together  this  clasj)  held 
the  threads  fast;  a  certain  ))ortion  of  roving  being  extended 
from  the  spindles  to  the  wooden  clasp,  the  clasp  was  closed, 
and  was  then  drawn  along  the  horizontal  frame  to  a  consid- 
erable distance  from  the  si)indles,  by  which  the  threads  were 
lengthened  out  and  reduced  to  the  proper  tenuity ;  this  was 
done  with  the  spinner's  left  hand,  and  his  right  hand  at  the 
same  time  turned  a  wheel  which  caused  the  spindles  to  re- 
volve rai)idly,  and  thus  the  roving  was  spun  into  yarn.  By 
returning  the  clasp  to  its  first  situation  and  letting  down  a 
piercer  wire,  the  yarn  was  wound  upon  the  spindle. " 

llargreaves  succeeded  in  keeping  his  admirable  invention 
secret  for  a  time ;   but  the  powers  of  his  machine  soon  he- 


It    i 


THE  GREAT  INVENTIONS. 


39 


came  known.  His  Ignorant  neighbors  hastily  conchided 
that  ti  machine  which  enabled  one  spinster  to  do  the  work 
of  eight  would  throw  multitudes  of  persons  out  of  emjjloy- 
mcnt.  A  mob  broke  into  his  house  and  destroyed  his  ma- 
chine. Ilargreaves  himself  had  to  retire  to  Nottingham, 
where,  with  the  friendly  assistance  of  another  person,  he  was 
able  to  take  out  a  patent  for  the  spinning-jenny,  as  the 
machine,  in  compliment  to  his  industrious  wife,  was  called. 

The  invention  of  the  spinning-jenny  gave  a  new  impulse  to 
the  cotton  manufacture.  But  the  invention  of  the  spinning- 
jenny,  if  it  had  been  accompanied  by  no  other  improvements, 
would  not  have  allowed  any  purely  cotton  goods  to  be  manu- 
factured in  England.  The  yarn  spim  by  the  jenny,  like  that 
which  had  previously  been  spun  by  hand,  was  neither  line 
enough  nor  hard  enough  to  be  employed  as  Avarp,  and  linen 
or  woollen  threads  had  consequently  to  be  used  for  this  pur- 
pose. In  the  very  year,  however,  in  which  Ilargreaves 
moved  from  Blackburn  to  Nottingham,  Richard  Arkwright 
took  out  a  patent  for  his  still  more  celebrated  machine.  It 
is  alleged  that  John  Wyatt,  of  Birmingham,  thirty  years 
before  the  date  of  Arkwright's  patent,  had  elaborated  a 
machine  for  spinning  by  rollers.  But  in  a  woi-k  of  this 
description  it  is  impossible  to  analyze  the  conflicting  claims 
of  rival  inventors  to  the  credit  of  discovering  ])articu- 
lar  machinery;  and  the  historian  can  do  no  more  than 
record  the  struggles  of  those  whoso  names  are  associated 
with  the  improvements  which  he  is  noticing.  Richard 
Arkwright,  like  John  Ilargreaves,  had  a  humble  origin. 
Ilargreaves  began  life  as  a  poor  weaver;  Arkwright,  as  a 
barber's  assistant.  Ilargreaves  had  a  fitting  partner  in  his 
industrious  wife  Jenny.  Mrs.  Arkwright  is  said  to  have 
destroyed  the  models  which  her  husband  had  made.  But 
Arkwright  was  not  deterred  from  his  pursuit  by  the  poverty 
of  his  circumstances  or  the  ccmduct  of  his  wife.  "After 
many  years'  intense  and  painful  a])plication,"  he  invented 
his  memorable  machine  for  spinning  by  rollers;  and  laid  the 
foundations  of  the  gigantic  industry  which  has  done  more 
than  any  other  trade  to  concentrate  in  this  country  the  wealth 


'^l 


40 


ECONOMIC  HISTORY. 


of  the  world.  The  principle  of  Arkwright's  groat  invention 
is  very  simple.  He  [assod  the  thread  over  two  pairs  of  rol- 
lers, one  of  which  was  made  to  revolve  much  more  rapidly 
than  the  other.  The  thread,  after  passing  over  the  pair 
revolving  slowly,  was  drawn  into  the  requisite  tenuity  by  the 
rollers  revolving  at  a  higher  rapidity.  By  this  sini])le  ])ut 
memorable  invention  Arkwright  succeeded  in  i)roducing 
thread  capable  of  emjtloymcnt  as  warp.  From  the  circum- 
stance that  the  mill  at  which  his  machinery  was  first  erected 
was  driven  by  water  power,  the  machine  received  the  some- 
what inappropriate  name  of  the  water-frame;  the  thread 
spun  by  it  was  usually  called  the  water-twist. 

The  invention  of  the  fly-shuttle  by  John  Kay  had  enabled 
the  weavers  to  consume  more  cotton  than  the  spinsters  had 
been  able  to  provide;  the  invention  of  the  s])inning- jenny 
and  the  water-frame  would  have  l^een  useless  if  the  old  sys- 
tem of  hand-carding  had  not  been  superseded  by  a  naore 
efficient  and  more  rapid  process.  Just  as  Arkwright  a])i»licd 
rotatory  motion  to  spinning,  so  Lewis  Paul  introduced 
revolving  cylinders  for  carding  cotton.  Paul's  machine 
consisted  of  "a  horizontal  cylinder,  covered  in  its  whole 
circumference  with  parallel  rows  of  cards  with  intervening 
spaces,  and  turned  by  a  handle.  Under  the  cylinder  was  a 
concave  frame,  lined  internally  with  cards  exactly  fitting 
the  lower  half  of  the  cylinder,  so  that  when  the  handle  was 
turned,  the  cards  of  the  cylinder  and  of  the  concave  frame 
worked  against  each  other  and  carded  the  wool."  "The 
cardings  were  of  course  only  of  the  length  of  the  cylinder, 
but  an  ingenious  apparatus  was  attached  for  making  thorn 
into  a  perpetual  carding.  Each  length  was  placed  on  a  flat 
broad  ril)bon  which  was  extended  between  two  short  cylin- 
ders and  which  wound  upon  one  cylinder  as  it  unwound  from 
the  other."! 

This  extraordinary  series  of  inventions  placed  an  almost 
unlimited  supply  of  yarn  at  the  disposal  of  the  weaver.  But 
the   machinery  which  had   thus   been  introduced  was  still 

*  Baincs'  "  History  of  the  Cotton  Manufacture,"  p.  173,  from  which  work 
the  preceding  quotations  are  also  taken. 


THE   GREAT  INVENTIONS. 


41 


incapable  of  providing  yarn  fit  for  tlic  finer  qualities  of  cot- 
ton cloth.  "The  water-frame  spun  twist  for  warps,  but  it 
could  not  bo  advantageously  used  for  the  liner  ciualities,  as 
thread  of  great  tenuity  has  not  strength  to  bear  the  pull  of 
the  rollers  when  winding  itself  on  the  bobbin."  This  defect, 
however,  was  removed  by  the  ingenuity  of  Samuel  Crompton,  a 
young  weaver  residing  near  IJolton.  Crompton  succeeded  in 
combining  in  one  machine  the  various  excellences  of  "Ark- 
wright's  water-frame  and  Ilargreavcs'  jenny."  Like  the  for- 
mer, his  machine,  whicli  from  its  nature  is  happily  called  the 
mule,  "  has  a  system  of  rollers  to  reduce  the  roving;  and,  like 
the  latter,  it  has  spindles  without  bobbins  to  give  the  twist, 
and  the  thread  is  stretched  and  spun  at  the  same  time  by  the 
spindles  after  the  rollers  have  ceased  to  give  out  the  rove. 
The  distinguishing  feature  of  the  mule  is  that  the  spindles, 
instead  of  being  stationary,  as  in  both  the  other  machines, 
are  placed  on  a  movable  carriage,  which  is  wheeled  out  to 
the  distance  of  fifty-four  or  fifty-six  inches  from  the  roller 
beam,  in  order  to  stretch  and  twist  the  thread,  and  wheeled 
in  again  to  wind  it  on  the  spindles.  In  the  jenny,  the  clasp 
whieh  held  the  rovings  was  drawn  back  by  the  hand  from  the 
spindles;  in  the  mule,  on  the  contrary,  the  spindles  recede 
from  the  clasp,  or  from  the  roller  beam,  which  acts  as  a 
clasp.  The  rollers  of  the  mule  draw  out  the  roving  much 
less  than  those  of  the  water-frame,  and  they  act  like  the 
clasp  of  the  jenny  by  stopi)ing  and  holding  fast  the  rove, 
after  a  certain  quantity  has  been  given  out,  while  the  spin- 
dles continue  to  recede  for  a  short  distance  farther,  so  that 
the  draught  of  the  thread  is  in  part  made  by  the  receding  of 
the  spindles.  By  this  arrangement,  comprising  the  advan- 
tages both  of  the  roller  and  the  s))indlos,  the  thread  is 
stretched  more  gently  and  equably,  and  a  much  finer  quality 
of  yarn  can  therefore  be  produced. "  ^ 

The  effects  of  Crompton's  great  invention  may  be  stated 
epigrammatically.  Before  Crompton's  time  it  was  thought 
impossible  to  spin  eighty  hanks  to  the  pound.     The  mule 


1  Baines's  "History  of  the  Cotton  Manufacture,"  pp.  197,  198. 


'iram-ri-raaagciEgijag 


I; 


It      ■!. 


42 


ECONOMIC  HISTORY. 


has  spun  (lirco  hundiTd  and  lilty  hanks  to  the  pound !  Tho 
uutivoH  of  India  coiihl  spin  u  pdund  of  coMcjn  into  a  thread 
one  hundred  and  nineteen  miles  long.  The  English  suc- 
ceeded in  spinnin;^  the  same  thread  to  a  length  of  one  hun- 
dred and  sixty  miles.'  Yarn  of  the  finest  <|tuility  was  at 
()n('(!  at  tlie  disposal  of  tin;  weaver,  and  an  o]»port unity  was 
alTorded  for  the  production  of  an  indelinite  (puintily  of  cotton 
yarn.  JUit  the  great  inventions  which  have  been  thus  enu- 
merated would  not  of  themselves  have  heen  sidlicient  to 
establish  the  cotton  manufacture  on  i(s  present  basis.  The 
ingemiity  of  Hargreaves,  Arkwiight,  and  Crompton  had 
been  exercised  U>  provide  the  weaver  with  yarn.  'J'heir  in- 
ventions had  provided  him  with  more  yarn  than  he  could  by 
any  jiossibility  use.  The  sitinster  had  beaten  the  weaver, 
just  as  the  weaver  had  previously  Itealcn  the  si»inster,  and 
the  manufacture  of  cotton  s(!emed  likely  to  staiul  still  be- 
cause the  yarn  could  not  be  woven  more  rapidly  than  an 
expert  workman  with  Kay's  improved  tly-shuttle  could 
weave  it. 

Such  a  result  was  actually  contcmpiated  by  some  of  the 
leading  manufacturers,  and  such  a  result  might  possibly  have 
temporarily  occurred  if  it  had  not  been  averted  by  the  inge- 
nuity of  a  Kentish  clergyman.  Eduuuid  Cartwright,  a  clergy- 
man residing  in  Kent,  ha})pened  to  be  staying  at  Matlock  in 
tho  summer  of  1784,  and  to  be  thrown  into  the  company  of 
some  Manchester  gentlemen.  The  conversation  turned  on 
Arkwright's  macliinery,  and  "one  of  the  com]iauy  observed 
that  as  soon  as  Arkwright's  patent  cxi)ired  so  many  mills 
would  be  erected  and  so  much  cotton  spun  that  hands  would 
never  be  found  to  weave  it."  Cartwright  replied  that  "  Ark- 
wright  must  then  set  his  wits  to  work  to  invent  a  Aveaving 
mill."  The  !^^anchester  gentlemen,  however,  unanimously 
agreed  that  the  thing  was  impracticable.  Cartwright  "  con- 
troverted the  im[)racticability  by  remarking  that  there  had 
been  exhibited  an  automaton  figure  which  ])layed  at  chess;" 
it  could  not  be  "more  diflicult  to  construct  a  machine  that 

'  Baincs's  "History  of  the  Cotton  Manuf.icturc,  p.  200,  and  "Colchester," 
vol.  ii.  p.  76. 


THE  GREAT  INVENTWSS. 


43 


shall  weave  than  one  which  shall  make  all  the  variety  of 
inov(\s  which  are  ro(|uiiv(l  in  that  t^oniplicated  jjaino. " 
Within  three  years  he  had  hinisell"  proved  that  th(>  invention 
was  praetieablo  by  prodtiein;jf  the  j)owerlooni.  Siiljsecpicnt 
inventois  improved  the  idea  whieh  Cartwri;:;lit  had  orij-i- 
natt'd,  and  witliin  'ifty  years  from  the  date  of  his  nu'nioral)Ie 
visit  to  Matloeli  (here  were  not  less  than  100,000  power- 
lo       '  at  work  in  (Ireat  IJritain  alune.* 

inventions  whieh  have  been  thus  enumerated  arc  the 
most  remarkable  of  the  improvements  whieh  stinnilated  the 
d(!veli)pm('nt  of  the  cotton  industry.  Hut  other  inventions, 
less  jj,enerally  r(!memi)cred,  were  hardly  less  wonderful  or 
less  beneficial  than  these.  Uj)  to  the  middle  of  last  century 
cotton  could  only  be  bleached  by  the  cloth  bein;?  steeped  in 
alkaline  lyes  for  several  days,  washed  clean,  and  spread  on 
the  ti'rass  for  some  weeks  to  dry.  The  jjrocess  had  to  l)e  re- 
peated several  times,  and  many  months  were  consumed  i)eforc 
the  tedious  operation  was  concluded.  Scheele,  the  Swedish 
philosopher,  discovered  in  177-1  the  bleaching  i>ropcrtie8  of 
chlorine,  or  oxymuriatic  acid.  BerthoUet,  the  French 
clunriist,  conceived  in  1785  the  idea  of  applying  the  acid  to 
bh  ing  cloth.  Watt,  the  inventor  of  the  steam-engine, 
a  Miry  of  Manchester,   respectively  introduced  the  new 

aeiu  .nto  the  bleaeh-lields  of  Macgregnr  of  (rlasgow  and 
Ridgway  of  Bolton.  The  process  of  bleaching  was  at  once 
reduced  fnmi  months  to  days,  or  even  hours. ^ 

In  the  same  year  in  which  Watt  and  llenry  were  introdu- 
cing the  new  acid  to  the  bleacher,  Bell,  a  Scotchman,  was 
laying  the  foundations  of  a  trade  in  printed  calicoes.  "The 
old  method  of  i)rintiiig  was  by  blocks  of  sycamore,  about  ten 
inches  long  by  five  broad,  on  the  surface  of  which  the  pat- 
tern was  cut  in  relief  in  the  common  method  of  wood  en- 
graving." As  the  block  had  to  be  apjdied  to  the  cloth  by 
hand,  "no  more  of  it  could  be  printed  at  once  than  the  block 
could  cover,  and  a  single  piece  of  calico,  twenty-eight  yards 
in  length,  required  the  application  of  the  block  four  hundred 

1  Raines's  "  Cotton,"  pp.  220,  235. 
'-  Ibid.,  i)p.  247-249. 


■'id 


^ 


.1 


11! 


44 


ECONOMIC  HISTORY. 


and  forty-eight  times. "  ^  This  clumsy  process  was  superseded 
by  cylinder  printing.  "A  polished  copper  cylinder,  several 
feet  in  length  and  three  or  four  inches  in  diameter,  is  en- 
graved with  a  pattern  round  its  whole  circumference  and  from 
end  to  end.  It  is  then  placed  horizontally  in  a  press,  and,  as  it 
revolves,  the  lower  part  of  the  circumference  passes  through 
the  coloring  matter,  which  is  again  removed  from  the  whole 
surface  of  the  cylinder,  except  the  engraved  pattern,  by  an 
elastic  steel  blade  placed  in  contact  with  the  cylinder,  and 
reduced  to  so  fine  and  straight  an  edge  as  to  take  off  the 
color  without  scratching  the  copper.  The  color  being  thus 
left  only  in  the  engraved  pattern,  the  piece  of  calico  or 
muslin  is  drawn  tightly  over  the  cylinder,  which  revolves 
in  the  same  direction,  and  prints  the  cloth."  The  sav- 
ing of  labor  "  effected  by  the  machine"  is  "  immense ;  one 
of  the  cylinder  machines,  attended  by  a  man  and  a  bc^y, 
is  actually  ca))able  of  producing  as  much  work  as  could 
be  turned  out  by  one  hundred  block  printers,  and  as  many 
tear  boys. "  '■^ 

Such  are  the  leading  inventions  which  made  Great  Britain 
in  less  than  a  century  the  wealthiest  country  in  the  world. 
"When  we  undertook  the  cotton  manufacture  we  had  com- 
paratively few  facilities  for  its  prosecution,  and  had  to 
struggle  with  the  greatest  difficulties.  The  raw  material 
was  produced  at  an  immense  distance  from  our  shores,  and 
in  Hindustan  and  in  China  the  inhabitants  had  arrived  at 
such  perfection  in  the  arts  of  spinning  and  weaving  that  the 
lightness  and  delicacy  of  their  finest  cloths  emulated  the 
web  of  the  gossamer,  and  seemed  to  set  competition  at  defi- 
ance. Such,  however,  has  been  the  influence  of  the  stupen- 
dous discoveries  and  inventions  of  Hargreaves,  Arkwright, 
Croni])ton,  Cartwright,  and  others,  that  we  have  overcome 
all  these  difficulties,  —  that  neither  the  extreme  cheapness  of 
labor  in  Hindustan,  nor  the  excellence  to  which  the  natives 
had  attained,  has  enabled  them  to  withstand  the  com]i(»tition 
of  those  who  buy  their  cotton,  and  who,  after  carrying  it 

»  Bnines's  "  Cotton,"  pp.  204,  205. 
2  Ibid.,  pp,  '205,  206. 


THE   GREAT  INVENTIONS. 


45 


five  thousand  miles  to  be  manufactured,  carry  back  the  goods 
to  them. "  1 

If  Great  Britain  entirely  monopolized  the  woollen  and  the 
cotton  trades,  she  had  done  her  best,  in  her  own  way,  to 
promote  the  manufacture  of  linen  in  Ireland.  In  1698  Par- 
liament, while  rigorously  prohibiting  the  exportation  of 
Irish  woollen  goods,  sedulously  attempted  to  encourage  the 
linen  manufacture  in  Ireland.  Bounties  were  paid  on  all 
linen  goods  imported  into  this  country  from  the  sister 
island;  and  the  great  linen  trade  ac(iuired,  especially  in 
Ulster,  the  importance  which  it  still  retains.  In  1800 
31,978,039  yards  of  linen  were  exported  from  Ireland  to 
Great  Britain,  and  2,585,829  yards  to  other  countries.  In 
1815  the  export  trade  had  risen  to  37,986,359  and  5,496,206 
yards  respectively.  A  formidable  rival  to  Ulster  was,  how- 
ever, slowly  rising  in  another  part  of  the  kingdom.  At  the 
close  of  the  great  French  war  Dundee  was  still  an  insignifi- 
cauu  manufacturing  town,  but  the  foundations  were  already 
laid  of  the  surprising  supremacy  which  she  has  since  ac- 
quired in  the  linen  trade.  Some  three  thousand  tons  of  flax 
were  imported  into  the  Scotch  {)ort  in  1814.  But  the  time 
was  rapidly  coming  when  the  shipments  of  linen  from  this 
single  place  were  to  exceed  those  from  all  Ireland,  and  Dun- 
dee was  to  be  sjioken  of  by  professed  economists  as  the  Man- 
chester of  the  linen  trade. ^ 

The  silk  manufacturers  of  Britain  have  never  yet  succeeded 
in  acquiring  the  predominance  which  the  woollen,  cotton, 
and  linen  factors  have  virtually  obtained.  The  worm  by 
which  the  raw  material  is  produced  has  never  been  accli- 
matized on  a  large  scale  in  England  ;  and  the  trade  has  natu- 
rally flourished  chiefly  in  those  countries  where  the  worm 
could  live  and  spin,  or  where  the  raw  materiiil  could  be  the 
most  easily  procured.  Insular  prejiulice,  moreover,  should 
not  induce  the  historian  to  forget  another  reason  which  has 
materially  interfered  with  the  development  of  this  particular 
trade.     The  ingenuity  of  the  writish  was  superior  to  that  of 

1  McCullocli's  "  Commorcifil  Diet.,"  ad  verb.  Cotton. 

*  McCuUoch,  ad  verb.  Linen;  Porter's  "Progress  of  the  Nation,"  p.  280. 


i! 


'11^ 


fk 


46 


ECONOMIC  HISTORY. 


every  other  nation ;  but  the  taste  of  the  British  was  inferior 
to  tliat  of  most  people.  An  article  which  was  only  worn  by 
the  rich,  and  which  was  only  used  for  its  beauty  and  deli- 
cacy, was  naturally  produced  most  successfully  by  the  most 
artistic  pcoitlc.  English  woollen  goods  found  their  way  to 
every  continental  nation ;  but  the  wealthy  English  imported 
their  finest  lustrings  and  a  les  modes  from  Italy  and  France. 
The  silk  trade  would,  in  fact,  have  hardly  found  a  home  in 
England  at  all  had  it  not  been  for  the  folly  of  a  neighboring 
potentate.  Louis  XIV.,  in  a  disastrous  hour  for  France, 
revoked  the  Edict  of  Nantes ;  and  the  French  Huguenots,  to 
their  eternal  honor,  preferring  their  consciences  to  their 
country,  sought  a  home  among  a  more  liberal  people.  The 
silk  weavers  of  France  settled  in  Spitalfields,  and  the  British 
silk  trade  gained  rapidly  on  its  foreign  rivals.  Parliament 
adopted  the  usual  clumsy  contrivances  to  promote  an  indus- 
try whose  importance  it  was  no  longer  possible  to  ignore. 
Prohibitory  duties,  designed  to  discourage  the  importation 
of  foreign  silk,  were  imposed  by  the  legislature ;  monopolies 
were  granted  to  successful  throwsters,  and  every  precaution 
was  taken  which  the  follies  of  protection  could  suggest,  to 
perpetuate  the  supremacy  which  Great  Britain  was  gradually 
acquiring  in  the  silk  trade.  The  usual  results  followed  this 
short-sighted  policy.  Prohibitory  duties  encouraged  smug- 
gling. Foreign  silk  found  its  Avay  into  England,  and  the 
revenue  was  defrauded  accordingly.  The  English  trade 
began  to  decline,  and  Parliament  again  interfered  to  pro- 
mote its  prosjjerity.  In  that  unhappy  period  of  English 
history  which  succeeds  the  fall  of  Chatham  and  the  rise  of 
Pitt,  Parliament  adopted  fresh  expedients  to  i)nimoto  the 
pro8{)erity  of  the  silk  trade.  Prohibitory  duties  were  •  o- 
placed  with  actual  prohibition,  and  elal)orate  attempts  wcrc 
made  to  regulate  the  wages  of  the  S|)itaUields  weavers.  The 
natural  cousequeucps  ensued.  Smuggling,  which  had  been 
created  l)y  prohibitive  duties,  flourished  with  fresh  vitality 
imder  the  iufhu-nce  of  actual  prohil)iti(m.  The  capitalists 
transferred  their  mills  from  Spitalfields,  where  the  labors 
of  their  workmen  were  fixed  by  law,  to  Macclesfield  and 


THE   GREAT  INVENTIONS. 


47 


other  places,  where  master  and  workmen  were  free  to  make 
their  own  terms. 

The  silk  trade  was  hardly  being  developed  with  the  same 
rapidity  as  the  three  other  textile  industries.  But  silk, 
like  wool,  cotton,  and  linen,  was  affording  a  considerable 
amount  of  employment  to  a  constantly  growing  population. 
The  textile  industries  of  this  country  could  not  indeed  have 
acquired  the  importance  which  they  have  since  obtained,  if 
the  inventions  of  Hargreaves,  Arkwright,  Crompton,  and 
Cartwright  had  not  been  supplemented  by  the  labors  of  ex- 
plorers in  another  field.  Machinery  makes  possible  what 
man  by  manual  labor  alone  would  find  it  impossible  to  per- 
form. But  machinery  would  be  a  useless  incumbrance  were 
it  not  for  the  presence  of  some  motive  power.  From  the 
earliest  ages  men  have  cudea.'ored  to  supplement  the  brute 
force  of  animals  with  the  more  powerful  forces  which  nature 
has  placed  at  their  disposal.  The  ox  was  not  to  be  perpetu- 
ally used  to  tread  out  the  corn;  women  were  not  always  to 
pass  their  days  laboriously  grinding  at  a  mill.  The  move- 
ment of  the  atmosphere,  tlio  f  "w  of  running  water,  were  to 
be  taken  into  alliance  with  man;  and  the  invention  of  wind- 
mills and  water-mills  was  to  mark  an  advance  in  the  onward 
march  of  civilization.  But  air  and  water,  mighty  forces  as 
they  are,  proved  but  fickle  and  uncertain  auxiliaries.  When 
the  wind  was  too  low  its  strength  was  insulliciont  to  turn  the 
cumbrous  sails  of  the  mill;  when  it  was  too  high  it  deranged 
the  cf)mplicated  machinery  of  the  miller.  The  miller  Mdio 
trusted  to  water  was  hardly  more  fortunate  than  the  man 
who  relied  u})on  air.  A  summer  drought  reduced  the  power 
of  his  wheel  at  the  very  time  when  long  days  and  fine 
weather  made  him  anxious  to  accomplish  the  utmost  possi- 
ble amount  of  work.  A  flood  swept  away  the  dam  on  whicji 
his  mill  depended  for  its  supply  of  water.  An  admiral)lc 
auxiliary  during  certain  portions  of  each  year,  water  was 
occasionally  too  strong,  occasionally  too  weak,  for  the  pur- 
poses of  the  miller. 

The  manufacturing  industry  of  the  country  stood,  there- 
fore, in  need  of  a  new  motive  power;  and  invention,  which 


IM 


r  s 


!i 


"*''* 

>i'» 


1 

iil       '4 


II    i 


'■  I, 


lif 


II 


'I! 


48 


ECONOMIC  HISTORY. 


is  supposed  by  some  thinkers  to  depend  like  other  commod- 
ities on  tlie  laws  of  demand  and  supply,  was  busily  elaborat- 
ing a  new  problem, — the  use  of  a  novel  power,  which  was  to 
revolutionize  the  world.  The  elasticity  of  hot  water  had 
long  been  noticed,  and  for  a  century  and  a  half  before  the 
period  of  this  history  a  few  advanced  thinkers  had  been 
speculating  on  the  possibility  of  utilizing  the  expansive 
powers  of  steam.  The  Marquis  of  Worcester  had  described, 
in  his  "Century  of  Inventions,"  "an  admirable  and  most 
forcible  way  to  drive  up  water  by  means  of  fire."  Steam 
was  actually  used  early  in  the  eighteenth  century  as  a  mo- 
tive power  for  pum]nng  water  from  mines ;  and  Newcomen, 
a  blacksmith  in  Dartmouth,  invented  a  tolerably  efTicient 
steam-engine.  It  was  not,  however,  till  17G9  that  James 
Watt,  a  native  of  Greenock,  and  a  mathematical  instrument- 
maker  in  Glasgow,  obtained  his  first  patent  for  "methods  of 
lessening  the  consumption  of  steam,  and  consequently  of 
fuel,  in  fire-engines."  James  Watt  was  born  in  1730.  His 
father  was  a  magistrate,  and  had  the  good  sense  to  encour- 
age the  good  turn  for  mechanics  which  his  son  displayed  at 
a  very  early  age.  At  the  age  of  nineteen  Watt  was  placed 
with  a  mathematical  instrument-maker  in  Londtm.  But 
feeble  health,  which  had  interfered  with  his  studies  as  a 
boy,  prevented  him  from  pursuing  his  avocations  in  England. 
Watt  rt'turncd  to  his  native  country.  The  Glasgow  body  of 
Arts  and  Trades,  however,  refused  to  allow  him  to  exercise 
his  calling  within  the  limits  of  their  jurisdiction;  and  had  it 
not  l)('on  for  the  University  of  Glasgow,  which  befriended 
him  in  his  difficulty,  and  appointed  him  their  mathematical 
instrument-maker,  the  career  of  one  of  the  greatest  g(>niuses 
whom  (^.reat  Britain  has  produced  would  have  been  stinted 
at  its  outset. 

There  happened  to  be  in  the  University  a  model  of  New- 
comen's  engine.  It  happened,  too,  that  the  model  was 
defectively  constructed.  Watt,  in  the  ordinary  course  of 
his  business,  was  asked  to  remedy  its  defects,  and  he  soon 
succeeded  in  doing  so.  But  his  examination  of  the  model 
convinced  him  of  serious  faults  in  the  original.     Newcomen 


THE  GREAT  INVENTIONS. 


49 


had  injected  cold  water  into  the  cylinder  in  order  to  con- 
dense the  ateam  and  thus  obtain  a  necessary  vacuum  for  the 
piston  to  work  in.  Watt  discovered  that  three  fourths  of 
the  fuel  which  the  engine  consumed  was  required  to  reheat 
the  cylinder.  "  It  occurred  to  him  that  if  the  condensation 
could  be  performed  in  a  separate  vessel,  communicating  with 
the  cylinder,  the  latter  could  be  kept  hot  wliile  the  former 
was  cooled,  and  the  vapor  arising  from  the  injected  water 
could  also  be  prevented  from  impairing  the  vacuum.  The 
comminiication  could  easily  be  effected  by  a  tube,  and  the 
water  could  be  pumped  out.  This  is  the  first  and  the  grand 
invention  by  which  lie  at  once  saved  three  fourths  of  the  fuel, 
and  increased  the  power  one  fourth,  thus  making  every  pound 
of  coal  produce  five  times  the  force  formerly  olitaincd  from 
it."*  But  Watt  was  not  satisfied  with  this  single  improve- 
ment. He  introduced  steam  above  as  well  as  below  the 
piston,  and  thus  again  increased  the  power  of  the  machine, 
lie  discovered  the  princii)lc  of  parallel  motion,  and  thus 
made  the  piston  move  in  a  true  straight  line.  He  regulated 
the  supply  of  water  to  the  boiler  by  the  means  of  "lloats," 
the  supply  of  steam  to  the  cylinder  by  the  application 
of  "the  governor,"  and,  by  the  addition  of  all  these  discov- 
eries, "satisfied  himself  that  he  had  almost  created  a  new 
engine,  of  incalculable  power,  universal  application,  and  in- 
estimable value.  "2  It  is  unnecessary  to  relate  in  these 
pages  the  gradual  introduction  of  the  new  machine  to  the 
manufacturing  public.  Watt  was  first  connected  with  Dr. 
Roebuck,  an  iron-master  of  Glasgow.  But  his  name  is  per- 
manently associated  with  that  of  Mr.  Boultun,  the  proprietor 
of  the  Soho  Works  near  Birmingham,  whose  partner  he  be- 
came in  1774.  Watt  and  Boulton  rajjidly  supplemented  the 
original  invention  with  further  improveiueuts.  Other  in- 
ventors succeeded  in  the  same  field,  and  by  the  beginning  of 
the  present  century  steam  was  established  as  a  new  force; 
ad.anced  thinkers  Averc  considering  the  possibility  of  apply- 
ing it  to  purposes  of  locomotion. 

1  Lord  Brougham's  "  Men  of  Letters  and  Science,"  p.  367. 

2  Ibid.,  p.  371. 


n  h 


I 


I' 


11' 


50 


ECONOMIC  HISTORY. 


The  steam-engine  indeed  would  not  have  been  invented  in 
the  eighteenth  century,  or  would  not  at  any  rate  have  been 
discovered  in  this  country,  if  it  had  not  been  for  the  vast 
mineral  wealth  with  which  Great  Britain  has  fortunately 
been  provided.  Iron,  the  most  useful  of  all  metals,  presents 
greater  difficulties  than  any  other  of  them  to  the  manufac- 
turer, and  iron  was  probably  one  of  the  very  last  minerals 
which  was  applied  to  the  service  of  man.  Centuries  elapsed 
before  the  rich  mines  of  our  own  country  were  even  slightly 
worked.  The  Romans  indeed  established  iron  works  in 
Gloucestershire,  just  as  they  obtained  tin  from  Cornwall  or 
lead  from  Wales.  But  the  British  did  not  imitate  the  ex- 
ample of  their  earliest  conquerors,  and  the  little  iron  which 
was  used  in  this  country  was  imported  from  abroad.  Some 
progress  was,  no  doubt,  made  in  the  southern  counties,  —  the 
smelters  naturally  seeking  their  ores  in  those  places  where 
wood,  then  the  only  available  fuel,  was  to  be  found  in  abun- 
dance. Tlie  railings  which  but  lately  encircled  our  metro- 
politan cathedral  were  cast  in  Sussex.  But  the  prosperity 
of  the  trade  involved  its  own  ruin.  Iron  could  not  be  made 
without  large  quantities  of  fuel.  The  wood  gradually  dis- 
appeared before  the  operations  of  the  smelter,  and  the  coun- 
try gentlemen  hesitated  to  sell  their  trees  for  fuel  when  the 
increase  of  shipping  was  creating  a  growing  demand  for 
timber.  Nor  were  the  country  gentlemen  animated  in  this 
respect  by  purely  selfish  motives.  Parliament  itself  shared 
their  apprehensions  and  endorsed  their  views.  It  regarded 
the  constant  destruction  of  timber  with  such  disfavor  that  it 
seriously  contemplated  the  suppression  of  the  iron  trade  as 
the  only  practical  remedy,  "^fany  think,"  said  a  contem- 
porary writer,  "  that  there  should  be  no  works  anywhere, 
they  so  devour  the  woods.  "^  Fortunately,  so  crucial  a  rem- 
edy was  not  necessary.  At  the  commencement  of  the  seven- 
teenth century,  Dud  Dudley,  a  natural  son  of  Lord  Dudley, 
had  proved  the  feasibility  of  smelting  iron  with  coal;  but 
the  prejudice  and  i  norance  of  the  work-people  had  pre- 
vented the  adoption  of  his  invention.     In  the  middle  of  the 

1  Smiles's  "Industrial  Biograpliy,"  p.  43. 


THE  GREAT  INVENTIONS. 


61 


eighteenth  century  attention  was  again  drawn  to  his  pro- 
cess, and  the  {)()ssibility  of  substituting  coal  for  wood  was 
conclusively  established  at  the  Darby's  works  at  Coalbrook 
Dale.  The  impetus  which  was  thus  given  to  the  iron  trade 
was  extraordinary.  The  total  produce  of  the  country 
amounted  at  the  time  to  only  eighteen  thousand  tons  of  iron 
a  year,  four  filths  of  the  inm  used  being  imported  from 
Sweden.  In  1802  Great  Britain  possessed  one  hundred  and 
sixty-eight  blast-furnaces,  and  produced  170,000  tons  of 
iron  annually.  In  1806  the  produce  had  risen  to  250,000 
tons;  it  had  increased  in  1820  to  400,000  tons.  Fifty  years 
afterwards,  or  in  1870,  6,000,000  tons  of  iron  were  produced 
from  British  ores.* 

The  progress  of  the  iron  trade  indicated,  of  course,  a  cor- 
responding development  of  the  supply  of  coal.  Coal  had 
been  used  in  England  for  domestic  purposes  from  very  early 
periods.  Sea  coal  had  been  brought  to  London ;  but  the 
citizens  had  complained  that  the  smoke  was  injuiious  to 
their  health,  and  had  persuaded  the  legislature  to  forl)id  the 
use  of  coal  on  sanitary  grounds.  The  convenience  of  the 
new  fuel  triumphed,  however,  over  the  arguments  of  the  sani- 
tarians and  the  prohibitions  of  the  legislature,  and  coal 
continued  to  be  brought  in  constantly  though  slowly  increas- 
ing (piantities  to  London.  Its  use  for  smelting  iron  led  to 
new  contrivances  for  ensuring  its  economical  i)r()dnction. 
Before  the  commencement  of  the  present  century  there  were 
two  great  dilliculties  which  interfered  with  the  operations  of 
the  miner.  The  roof  of  the  mine  had  necessarily  to  be 
propi)ed,  and,  as  no  one  had  thought  of  using  wood,  and  coal 
itself  was  cnijdoyed  for  the  purpose,  only  sixty  per  cent  of 
the  produce  of  each  mine  Avas  raised  above  ground.  About 
the  l)oginning  of  the  nineteenth  century  timber  struts  wen> 
gradually  sul)stitut('d  for  the  jiillars  of  coal,  and  it  l)ecam(' 
consequently  possible  to  raise  from  the  mine  all  the  coal 
won  by  the  miner.     A  still  more  important  discovery  was 

»  "Diet.  Hist."  vol.  iv.  p.  080;  MfiCiilIoch,  "Diet,  of  rommcrcp,"  nd  vorh. 
Iron;  Porter's  "Progress  of  the  Nation,"  p.  620;  Statistical  Abstract  of  tiie 
United  Kingdom. 


1 

'111 


'    \\ 


■"^mmfrnfmrmfm 


' 


i  § 


1 

S  3 


52 


ECONOMIC  HISTORY. 


made  at  the  exact  period  at  which  this  history  commences. 
The  coal-miner  in  his  imderground  calling  was  constantly 
exposed  to  the  dangers  of  fire-damp,  and  was  liable  to  be 
destroyed  without  a  moment's  notice  by  the  most  fearful 
catastrophe.  In  the  year  in  which  the  great  French  war 
was  concluded,  Sir  Humphrey  Davy  succeeded  in  perfecting 
his  safety-lamp,  an  invention  which  enabled  the  most  dan- 
gerous mines  to  be  worked  with  comparative  safety,  and 
thus  augmented  to  an  extraordinary  extent  the  availal)le 
8ui)])lics  of  coal.' 

llumi)hrey  Davy  was  the  son  of  a  wood-carver  of  Pen- 
zance, and  early  in  life  was  apprenticed  to  a  local  apothe- 
cary. Chance  —  of  which  other  men  would  i)erhai)s  have 
failed  to  avail  themselves  —  gave  the  lad  an  opportunity  of 
cultivating  his  taste  for  chemistry.  A  French  surgeon, 
wrecked  on  the  coast,  to  whom  Davy  had  shown  some  kind- 
ness, gave  him  a  case  of  surgical  instruments,  and  "the 
means  of  making  some  api)roximation  to  an  exhausting 
engine."  Watt's  son,  Gregory  Watt,  was  ordered  to  winter 
in  Cornwall  for  Ms  health,  and  happened  to  take  apartments 
in  the  house  of  Davy's  mother.  "Another  accident  throw 
him  in  the  way  of  Mr.  Davies  Giddy,  a  cultivator  of  natural 
as  well  as  mathematical  science."  Giddy  "gave  to  Davy 
the  use  of  an  excellent  library;"  he  "introduced  him  to  Dr. 
Beddoes,"  who  made  his  young  friend  the  head  of  "a  jnieu- 
matic  institution  for  the  medical  use  of  gases,"  whicli  he 
was  then  forming.  The  publication,  soon  afterwards,  of  a 
fanciful  paper  on  light  and  heat  gave  Davy  a  ctmsiderable 
reputatiou.  He  was  successively  chosen  assistant  lecturer 
in  cheiuistry,  and  sole  chemical  professor  of  the  Royal  In- 
stitution. While  he  held  this  ollice  his  inquiries  induced 
him  to  investigate  the  causes  of  the  fearful  explosions  which 
continually  took  place  in  coal  mines.  He  socm  satisfied 
himself  that  carburetted  hydrogen  is  the  cause  of  fire-damp; 
and  Ihat  it  will  not  ex])lode  unless  mixed  with  atmos]ilieric 
air  "in  proportions  i)etween  six  and  fourteen  times  its 
bulk;"  and  "he  was  surprised  to  observe  in  the  course  of 

1  Porter's  "  Progress  of  the  Nation,"  p.  277 ;  McCuUoch,  ad  verb.  Coal. 


) 


■  twP 


'"'i. 


THE  GREAT  INVENTIONS. 


53 


his  experiments,  made  for  ascertaining  how  the  inflamma- 
tion takes  place,  that  the  flames  will  not  pass  through  tubes 
of  a  certain  length  and  smallncss  of  bore.  He  then  found 
that,  if  the  length  be  diminished  and  the  bore  also  reduced, 
the  flames  will  not  pass;  and  he  further  found  that  by  niul- 
ti[)lying  the  number  of  the  tubes  this  length  may  be  safely 
diminished,  provided  the  bore  be  proportionally  lessened. 
Hence  it  appeared  that  gauze  of  wire,  whose  meshes  were 
only  one  twenty-second  of  an  inch  in  diameter,  stopped  the 
flame  and  prevented  the  explosion."^  These  successive 
discoveries,  the  results  of  repeated  experiments  and  careful 
thought,  led  to  the  invention  of  the  safety-lamp.  The  first 
safety-lamp  was  made  in  the  year  1815.  There  is  some  sat- 
isfaction in  reflecting  that  the  very  year  which  was  memo- 
rable for  the  conclusion  of  the  longest  and  most  destructive 
of  modern  wars,  was  also  remarkable  for  one  of  the  most 
beneficial  discoveries  which  have  ever  been  given  to  man- 
kind. Even  the  peace  of  Paris  did  not  probably  save  more 
life  or  avert  more  suffering  than  Sir  Humphrey  Davy's  in- 
vention. The  gratitude  of  a  nation  properly  bestowed  titles 
and  pensions,  lands  and  houses,  stars  and  honors,  on  the 
conqueror  of  Napoleon.  Custom  and  precedent  only  allowed 
inferior  rewards  to  the  inventor  of  the  safety-lamp.  Yet 
Hargreaves  and  Ai-kwright,  Crompton  and  Cartwright,  Watt 
and  Davy,  did  more  for  the  cause  of  mankind  than  even 
"Wellington.  Their  lives  had  more  influence  on  their  coun- 
try's future  than  the  career  of  the  great  general.  His 
victories  secured  his  country  peace  for  rather  more  than  a 
generation.  Their  inventions  gave  Great  Britain  a  commer- 
cial supremacy  which  neither  war  nor  foreign  competition 
has  yet  destroyed. 

A  series  of  extraordinary  inventions,  at  the  commenoe- 
ment  of  the  present  century,  had  supjilied  Great  Britain 
with  a  new  manufacturing  vigor.  Hargreaves,  Arkwright, 
Crompton,  and  Cartwright  had  developed,  to  a  remarkable 
degree,  the  producing  power  of  man ;  Watt  had  given  a  new 

1  See  Brougham's  "  Men  of  Letters  and  Science,"  p.  462.  The  life  of  Davy 
is  admirably  told  by  Lord  Brougham. 


f 


♦r,i 


I  .    !.! 


H 


■MM 


f 


ni 


54 


ECONOMIC  IJISTOIIY. 


significance  to  tholi*  inventions  by  superseding  the  feeble 
and  unequal  forces  which  had  hitherto  been  used,  with  the 
most  tractable  and  powerful  of  agents.  And  Davy,  by  his 
beneficent  contrivance,  had  enabled  coal  to  be  won  with 
less  diinger,  and  had  relieved  the  miner's  life  from  one 
of  its  most  hideous  perils.  The  ingenuity  of  these  great 
men  had  been  exercised  with  different  objects;  but  the  in- 
ventions of  each  of  them  had  given  fresh  importance  to  the 
discoveries  of  the  others.  The  spinning-jenny,  the  water- 
frame,  and  the  mule  would  have  been  deprived  of  half  their 
value  if  they  had  not  been  supplemented  with  the  })Ower- 
loom ;  the  power-loom  would,  in  many  i)laces,  have  been 
useless  without  the  steam-engine ;  the  steam-engine  would 
have  been  idle,  had  it  not  been  for  coal ;  the  coal  would 
not  have  been  won  without  danger,  had  it  not  been  for  Sir 
II.  Davy.  Coal,  then,  was  the  commodity  whose  extended 
use  was  gradually  revolutionizing  the  world;  and  the  popu- 
lation of  the  world,  as  the  first  conso(pience  of  the  change, 
gradually  moved  towards  the  coal  fields.  The  change  was 
just  commencing  at  the  beginning  of  the  present  century; 
it  was  proceeding  with  rapid  strides  at  the  period  at  which 
this  history  opens;  its  ultimate  effects  will  be  seen  later 
on  in  this  work.  The  time  was  to  come  when  the  coal  meas- 
ures of  England  were  to  draw  away  the  i)opulation  of  Ire- 
land, to  Aveaken  the  power  of  the  southern  agricultural 
counties,  to  give  i)redominance  to  the  north  of  England, 
and  by  these  results  to  involve  a  political  revolution. 


^u 


CAUHES  OF  TtlE  FRENCH  HE  VOLUTION. 


55 


III. 

ECONOMIC  CAUSES  OF  THE  FRENCH 
REVOLUTION. 

From  Von  Sydel'8  Fuencu  Revolution,'  Vol.  I.  i>p.  21-53. 


IN  ordor  to  bring  this  matter,  in  its  details,  more  clearly 
before  us,  \vc  may  pass  in  review  the  three  great  classes 
into  which  the  French  people  were  divided  according  to  their 
occupation.^  By  far  the  most  important  of  these  occupa- 
tions at  that  j)eriod  was  agriculture.  Nearly  21,000,000 
out  of  25,000,000  of  inhabitants  were  employed  in  tilling  the 
soil.  Of  the  51,000,000  hectares  of  which  the  whole  king- 
dom is  composed,  35,000,000  were  destined  for  cultivation, 
that  is,  rather  less  than  at  the  present  day,  but  more  than 
twice  as  much  as  is  now  under  cultivation  in  England.  It 
has  often  been  imagined  that  the  property  of  these  great 
masses  of  land  was  almost  entirely  in  the  hands  of  the 
church,  the  monasteries,  the  nobility,  and  the  financiers; 
and  that  before  1789  only  large  estates  existed,  while  the 
class  of  small  proprietors  was  created  by  the  Revolution. 
Some  consider  this  sui)posed  change  as  the  highest  glory, 
and  others  as  the  greatest  calamity  of  modern  times;  but 
all  are  agreed  as  to  the  fact,  and  the  more  so,  because  it  was 
continually  proclaimed  in  the  debates  of  the  revolutionary 
assemblies.  But  on  closer  examination  we  shall  find  that 
the  effects  of  the  feudal  system  upon  agriculture  are  not  to 

'  London:  J.  Murray,  1807. 

'^  III  drawing  up  tlie  following  statement  we  have  chiefly  consulted  the 
"  Statistique  nilnistcrielle  de  la  France,"  and  the  admirable  works  of  Moreau 
de  Yonne ;  and  also  Lavergne,  "  Economic  rurale."  The  latter  gives  much 
information  respecting  the  earlier  state  of  things,  which  now  and  then,  however, 
requires  examination  and  correction. 


!; 


t'-\ 


■  ■r.  I** 

m 


•\'n 


I 


li  I 


66 


ECONOMIC  iiisTonr. 


bo  looked  for  in  this  direction.  We  cannot  rank  tlic  author- 
ity of  the  revolutionary  orators  very  hij^h,  both  because  they 
had  a  political  interest  in  breaking  uj)  the  large  estates  for 
the  advantage;  of  the  city  proletaries,  and  beeaust;  they 
always  showed  tlu'nis(dves  fal)uloiisly  ignoiant  of  statistics. 
If  we  examine  the  state  of  things  before  178lt  we  shall  llnd 
that  —  apart  from  the  feudal  tenure's  and  the  church  property 
—  even  the  old  French  law  of  inheritance  by  no  means 
favored  the  accmnuliition  of  estates.  The  nobility,  indeed, 
were  often  heard  to  complain  tliat  the  roturierx  were  con- 
stantly getting  p(Jrtsession  of  land;  which  is  intedligible 
enough,  since  the  moneyed  classes  were  continually  gaining 
ground  on  the  ancient  aristocracy.  It  follows  that  there  was 
nothing  in  the  circumstances  of  the  age  to  render  the  division 
of  land  impossilde;  and  one  of  the  most  credible  witnesses, 
after  three  years'  investigation  in  all  the  French  |)rovin('es, 
tells  us,  as  the  result  of  his  observations,  that  about  a  third 
of  the  land  was  held  by  small  i)roprictors,  who  were  sulli- 
ciently  prosi)erous  in  Flanders,  Alsace,  Beam,  and  the  north 
of  IJretagne ;  but  in  other  parts,  especially  in  Lorraine  and 
Cliamj)agne,  jjoor  and  miserable.  The  division  of  property, 
he  observes,  is  carried  to  too  great  an  extent :  "  1  have  fre- 
quently seen  properties  of  ten  roods  with  a  single  fruit-tree; 
excessive  division  ought  to  be  forbidden  by  law."  The  wit- 
ness is  Arthur  Young,  one  of  the  first  agriculturists  of  the 
period  in  Europe,  who  gave  this  testimony  after  indefati- 
gable impury;  and  his  report  is  confirmed  by  native  author- 
ities. "The  subdivision  of  land,"  says  Turgot,  "is  carried 
to  such  an  extent  that  a  property  only  just  sunicient  for 
one  family  is  divided  among  five  or  six  children."  "The 
landed  estates,"  writes  an  Intendant,  "are  broken  uj)  syste- 
matically to  a  very  alarming  degree;  the  fields  are  divided 
and  subdivided  ad  injirtitum."  ^  Such  was  the  case  among 
the  small  proprietors;  the  other  two  thirds  of  the  soil  was 
entirely  in  the  possession  of  the  great  land-owners,  —  consist- 
ing partly  of  the  nobility  and  clergy,  and  partly  of  magis- 
trates and  financiers.  We  shall  {trcscntly  inquire  in  what 
'  Quoted  by  Tocquevilk-,  "  L'Ancicn  Regime,"  p.  60. 


CAUaiiS  OF  THE  FRENCH  REVOLUTION. 


57 


manner  they  turned  their  lands  to  profit;  but  \vc  may  lirst 
of  all  ol»8L'rvo  that  a  mid(U(!  class  of  proprietors,  substantial 
enoii}j:h  to  derive;  from  their  land  a  auilicient  liveliliood,  and 
yet  huniljle  enouj^h  to  l)o  bound  to  constant  and  diligent  labor, 
was  entindy  wanliiif,'.  In  the  present  day  the  landed  pro- 
prietors of  Franco  may  be  divided  into  thnio  sections,  each 
of  which  possesses  about  one  third  of  the  productive  soil  of 
tlu^  eounfry.  Eiu;htcen  million  hectares  beloii<^  to  1^^8,000 
great  landeil  owners;  fourteen  millions  to  700,000  proprie- 
tors of  the  middle  class,  and  fourteen  millions  to  not  ipiite 
four  millions  of  jieasant  owners.'  When  wo  compare  these 
figures  with  those  of  the  pre-revolutionary  period  we  (ind  the 
number  of  poor  ])ossessors  exactly  corrcjspoiuling  to  oiu;  an- 
other; and,  what  is  very  remarkable,  they  are  almost  exactly 
the  same  in  1831  as  in  1815.  The  most  fearful  storms  pass 
over  the  surface  of  the  land  without  producing  any  change  in 
tliese  relations.  IJut  what  the  movement  of  1789  —  the  eman- 
cipation of  the  soil,  and  civil  eipiality  —  <lid  produce  is  this 
middle  class  of  proprietors,  which  now  possesses  one  third  of 
the  land.  It  must  be  confessed  that  this  is  a  most  remark- 
able result.  II(jw  often  has  it  been  announced  by  feudalists 
and  socinlists  that  entire  freedom  of  trade  would  inevitably 
lead  to  the  auniliilation  of  the  middle  classes,  and  leave 
nothing  but  millionnaires  and  proletaries!  We  here  see 
the  very  contrary  proved  by  one  of  the  grandest  historical 
facts.  Th(>  feudal  system,  by  its  restrictions,  crushed  the 
agrii!ultur;il  middle  class;  the  rule  of  freedom  created  it 
afresh.  Let  us,  however,  consider  the  position  of  these  lords 
of  the  soil  and  their  dependents  more  closely. 

The  first  fact  which  meets  us  in  this  investigation  is  an 
unhappy  one.  It  was  only  an  excessively  small  minority  of 
the  great  land-owners  who  concerned  themselves  about  their 
estates  and   tenants.     All   who  were  at  all  able  to  do  so 


hufT-inil 


Coc 

4itiquc, 


•'  ly  to  the  enjoyments  of  the  court  or  the  capital, 
/etunied  to  their  properties  to  fill  the  purse  which 
i'mptied  by  their  excesses.     There  they  lived  in 

,  "  Revue  de  Deux  Mondes,"  September,  1848;  Rossi,  "ficonomie 
p.  025,  ct  scq. 


'     '1 

4- 


1  ?L 


68 


ECONOMIC  HISTORY. 


miserly  and  shabby  rotinnncnt;  sometimes  in  wretchedly 
i'lirnished  casth'S,  shuinu'd  by  the  peasants  as  pitiless  credi- 
tors; sometimes  in  the  midst  of  forests  and  wastes,  that  they 
might  have  the  pleasures  of  the  chase  close  at  hand.  They 
took  as  little  interest  in  intellectual  sulijects  as  ia  agricul- 
tiiial  alTairs.  and  cherished  little  or  no  intercouisi;  with 
their  neijihbors,  —  partly  from  parsimony,  and  partly  from  the 
entire  want  of  local  roa.ls.  When  the  period  of  fasting  was 
over,  they  rushed  eagerly  Inick  to  the  alluring  bauijuets  of 
Paris  and  Versailles.  The  number  of  exceptions  to  this 
melancholy  rule  was  so  suiall  as  to  exercise  no  inlluence  on 
the  general  conditimi  of  the  country. 

While  these  gentlemen  were  s(piandcring  the  |)rodu^o  of 
their  estates  in  aristocratic  splendor,  their  fields  were  let  out 
in  parcels  of  ten  or,  at  most,  fifteen  hectares,  to  the  so-called 
iiit-titijerffy  who  did  not  pay  a  fixed  rent,  but  generally  half 
the  gross  produce,  and  receivc.'d  from  the  owner,  in  return, 
their  first  see(l-eorn,  their  cattle,  and  agricultural  imple- 
ments.^ This  system  yielded  a  wretched  existence  for  the 
tenants  themselves,  and  reduced  *h-  estates  to  a  miserable 
conditiou,  but  it  lirought  the  owners  a  large  thongh  uncu'rtain 
income.  The  latter,  who  only  saw  their  estates  as  travellers, 
were  accustomed  to  farm  out  the  collection  of  their  dues, 
generally  to  a  notary  or  an  advocate,  who  treated  the  tenants 
with  merciless  severity. 

The  peasants,  in  their  turn,  neglected  the  cultivation  of 
corn  —  of  whieli  they  had  to  give  np  a  luoiety  —  for  any 
chance  occupation  the  whole  i)rofit  of  wliicii  f(dl  to  them- 
selves; they  used  their  oxen  rather  for  purposes  of  trans- 
port than  for  ploughing,  fattened  their  geese  in  their  own 
wheat  fields,  aud,  aliove  all,  introduced  the  system  of  alter- 
nating crop  and  fallow,  in  order  to  get  a  greater  extent  of 
pasture,  and  couseiiuontly  a  larger  nund)er  (tf  cattle.  This 
was  a  personal  gain  to  themscdves,  but  evidently  brought  no 
advantage  to  the  estate.  A  system  of  tillage,  in  short,  pro- 
vailed   without    industry,   without  science,    and,    al)ovc  all, 

1  Qucsnay  in  Dairc,  "  Pliysiocrates,"  p.  219,  ct  scq.;  Young's  "T">vel8," 
2d  cd.  vol.  i.  p.  ooij;  LuUia  do  Cliatcauviuux,  vol.  i.  p.  270. 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


59 


without  capital.  It  1ms  Itooii  calculated  that  the  average 
amount  of  cajjital  employed  at  that  period  in  the  French 
m^tciiries  was  from  forty  to  sixty  francs  to  the  hectare  ; 
while  in  England,  at  the  same  time,  the  avcrnge  amounted  to 
two  hundred  and  forty  francs.  ^  The  result  was,  of  course,  a 
wretched  one;  they  only  reckoned  ui)on  a  crop  of  from  seven 
to  eight  hectolitres  of  wheat  to  the  hectare, — the  incn.'ase 
being  from  fivo  to  six  fold;  while  the  English  farmer  of  that 
time  obtained  a  twelve-fold  increase.  It  was  impossilde  for 
the  peivaant  under  such  circumstances  to  gain  a  livelihood; 
the  produce  of  ton  hectares  was  scarcely  sullicient  to  support 
his  family,  and  sale  and  profit  were  out  of  the  (piestion. 
The  man  who  is  thus  ccmdenmed  to  pass  hirf  life  in  starva- 
tion siion  learns  to  fold  his  haiids^in  idleness.  A  c<m- 
stantly  increasing  extent  of  country  lay  unculfivate<l,  which 
Quesnay,  in  IToO,  estimated  at  a  (piarter  of  the  arable  land 
of  France,  and  Arthur  Young,  in  1790,  at  moi'e  than 
0,000,000  hectares.  ^lillions  of  rural  dwellings  had  no 
aperture  in  them  but  the  door,  or  at  most  one  window;'*  the 
people  had  no  clothing  but  a  home-made,  coarse,  and  yet  not 
thici<,  woollen  cloth;  in  many  ))rovinces  every  one  went 
barefoot,  aiul  in  others  only  wooden  shoes  were  known.  The 
food  of  the  people  was  gruel  with  a  little  lard;  in  the  even- 
ing a  i)iecc  of  bread,  and  on  great  occasions  a  little  bacon; 
but  liesides  this  no  meat  for  months  together,  and  in  many 
districts  no  wine  at  all.'^  The  mental  contlition  of  the  peo- 
pl(!  was  in  accordance  with  their  external  circumstances. 
Books  and  newspapers  were  as  little  known  in  the  villages  as 
reading  and  writing.  The  peasants  depended  for  instruction 
on  their  pastors  and  parish  clerks,  ])roletaries  like  tlu'mselves, 
who  very  seldom  got  beyond  the  horizon  of  the  church  steeple. 
TIk'  Church  was,  after  all,  the  only  institution  that  threw  nn 
intellectual  spark  into  their  wretc'hed  life;  Init  unfortunately 
their  religious  impulses  were  strongly  mixed  with  l)arbarism 


:i 


t 


m 


'  Arthur  Young,  vol.  i.  p.  435.    The  elder  Mirabcuu  reckons  for  the  whole 
of  Fraiici",  0(1  francs  to  the  arpcnt. 
-  This  is  still  tlie  case. 
'  Kcports  of  the  I'refocts  to  the  Ministry,  1803. 


60 


ECONOMIC  HISTORY. 


I' 


and  superstition.  In  many  large  districts  of  the  south  the 
peasants  had  no  other  idea  of  a  Protestant  than  as  of  a  dan- 
gerous magician  who  ought  to  be  knocked  on  the  head.  Their 
own  faith,  moreover,  was  interwoven  with  a  multitude  of  the 
strangest  images  of  old  Celtic  heathenism.  Of  the  world 
outside  thi'y  heard  nothing,  for  there  was  next  to  no  traflic 
or  travelling  in  the  country.  There  were  some  royal  roads, 
nuignilicently  nuide,  and  sixty  feet  in  breadth,  —  splendid 
monuments  of  monarchical  ostentation.  On  these,  however, 
up  to  177G,  only  two  small  coaches  ran,^  throughout  the 
whole  of  France ;  and  the  traveller  might  pass  whole  days 
without  getting  sight  of  any  other  vehicle.^  Only  few  vil- 
lages, in  the  most  favored  provinces,  possessed  cross-roads 
to  these  great  highways,  or  to  the  nearest  nuirket  town. 
And  thus  the  whole  existence  of  these  people  was  passed  in 
toil  and  privation;  without  any  pleasures  excei)t  the  sigh' 
of  the  gaudy  decorations  of  a  few  church  festivals;  without 
any  change,  save  when  hunger  drove  an  individual,  here  and 
there,  to  seek  day-labor  in  the  towns,  or  into  military  ser- 
vice. It  was  seldom  that  such  a  one  ever  returned  to  his 
father's  house,  so  that  his  fellow-villagers  gained  no  advan- 
tage from  his  wider  experience. 

Under  these  circumstances  the  relation  between  peasant 
and  lord  was  naturally  a  dej)lorable  one.  What  we  have 
already  said  sufficiently  characterizes  a  community  in  which 
all  the  enjoyments  fell  to  the  rich,  and  all  the  burdens  were 
heaped  upon  the  poor.  In  aristocratic  England  at  this 
period,  a  rpiarter  of  the  gross  proceeds  was  considered  a 
high  rent  for  a  farm,  and  the  owner,  moreover,  paid  large 
tithes  and  poor-rates.^  In  France,  half  the  proceeds  was  the 
usual  rent ;  ami  the  owners  were  exempted  by  their  privileges 
from  many  public  burdens,  which  fell  with  double  weight 
ni)on  the  wretched  mC'tayer».  Thus,  the  produce  of  the 
French  land,  as  compared  with  the  English,  was  nine  to 
fourteen,  while  the  rents  of  an  English  land-owner  were  at 

'  E.  Diiirp,  "Introduction  aux  ffiuvrcs  de  Turgot." 

«  Young's  "Travels." 

8  Yveriiois,  "  Tableau  des  Pertes,"  etc. 


CAUSES  OF   THE  FRENCH  REVOLUTION. 


61 


the  rate  of  two  and  three  fourths  per  cent,  and  those  of  the 
French  land-owner  three  and  three  fourths  per  cent.' 

The  deliciency  in  the  product  of  the  hind,  therefore, 
affected  the  gains  of  the  little  farmer  doul)ly,  In  addition 
to  this  he  was  burdened  l)V  a  numher  of  feudal  services,  by 
forced  lal)or  on  the  lands  of  his  lord,  by  tithes  to  the  Church, 
and  by  the  oljligation  to  make  roads  for  the  State.  The 
landlord,  who  tried  to  sell  his  rent  in  kind  as  dearly  as  pos- 
sible, wished  for  high  prices  of  corn;  the  peasant,  who,  after 
paying  his  dues,  did  not  raise  oiough  for  his  own  family, 
longed,  like  the  city  jjroletary,  for  low  prices.  In  short, 
these  two  classes,  so  intimately  connected  with  one  another,^ 
had  nothing  at  all  in  counnon;  in  education,  in  interests 
and  enjoyments,  they  were  as  widely  separated  as  the  in- 
habitants of  different  quarters  of  the  globe,  and  regarded 
each  other  respectively  with  contempt  and  hatred.  When 
the  peasant  looked  upon  the  towers  of  his  lord's  castle  the 
dearest  wish  of  his  heart  was  to  burn  it  down,  with  all  its 
registers  of  debt.  Here  and  there  a  bettor  state  of  things 
cxisttMl;  but  we  can  only  bring  forward  two  exceptions  to 
the  mi'hincholy  rule,  extending  over  large  tracts  of  country. 
In  Anjou  the  system  of  mdtairie  prevailed,  as  in  Lower 
Brctagne  and  Guienne;  and  yet  in  the  former  province  the 
peasants  were  jjrosperous,  and  the  noblemen  beloved.  Lower 
Poitoii  wiis  the  only  province  from  which  the  nobles  had  not 
alloweil  themselves  to  bo  enticed  into  the  whirlpool  of  court 
life.  The  nol)leman  dwelt  in  his  own  cnstle,  the  renl  lord 
of  his  d'luinins,  the  cultivator  of  his  lields,  the  guardian  of 
his  pea-Miuts.  lie  advanced  them  money  to  purchase  the 
necessary  stock,  and  instructed  them  in  the  managiMnent  of 
their  cattle  ;2  the  expulsion  of  a  tenant  was  a  thing  unheard 
of;  the  laborer  was  born  on  the  estate,  and  the  landlord  was 
the  godfather  of  all  his  farmers'  children.  Ife  wa;^  often 
seen  going  to  market  with  his  jieasants,  to  sell  their  oxen 
for  them  as  advantageously  as  possililo.  His  mental  iKU'i/.on, 
however,  did  not  extend  beyond  these  honorable  cares;  he 

1  Young. 

*  Sauvegrain,  "Considerations  sur  la  Population, "  etc.     Paris,  1800. 


,f.l 


'  ril 


w 


62 


ECONOMIC  HISTORY. 


m 


M 


honored  God  and  the  King,  labored  in  his  own  fields,  w.as  a 
good  sportsman  and  toper,  and  knew  as  little  of  the  world 
and  its  civilization  as  his  tenants. 

In  the  north  of  the  kingdom  a  more  modern  state  of  things 
had  grown  up.  There,  wealthy  farmers  were  to  be  seen, 
who  held  their  land  on  lease  at  a  fixed  money  rental, — 
which  was  settled  according  to  the  amount  of  the  taxes  to 
which  they  were  liable,  —  and  who  brought  l)oth  skill  and 
cai)ital  to  the  management  of  their  land.  This  was  the 
regular  practice  in  Flanders,  Artois,  Picardy,  Normandy, 
the  Isle  of  France,  and  other  smaller  districts.  In  these 
parts  the  landlords  had  a  certain  revenue,  and  their  land 
yielded  twici-  as  unu-h  as  that  which  was  in  the  hands  of  the 
mt'ldi/crs.  Tilt;  whole  country  wore  the  appearance  of  a  gar- 
den, and  the  poorer  neighljors  fomul  lucrative  emjilovment 
at  the  stately  farndiouses.  These  were  the  sam(!  ])rovince8 
in  which  Artluir  Young  met  with  small  proprietors  in  a  tol- 
erable condition.  If  a  jteasant  in  this  part  of  the  country 
possessed  a  small  stri^)  of  laud  near  his  cottage,  large  enough 
to  grow  some  vegetables,  food  for  a  goat,  or  a  few  vines,  he 
earned  sutlicient  to  supply  the  rest  of  his  wants,  in  day 
wages,  from  the  farmers,  or,  as  a  weaver,  from  the  neighbor- 
ing manufacturers. 

His  was  a  condition  similar  to  the  normal  one  of  the  peas- 
ant proprietors  in  France  at  the  present  day;  who  are  not 
reduced  farmeis.  Iiut  laborers  who  have  in\csted  their  sav- 
iuirs  in  laud.'  It  was  more  dillicult  for  these  iieojile  to  make 
a  livelihood  ;it  Ihat  time  than  now,  because  there  were  fewer 
nuiuufacturers  and  wealthy  agriculturists.  Fxcept  in  the 
altove-mentioned  provinces,  these  l>etty  proprietors  were 
C(piiilly  wnlclied  aud  hopeless  with  the  nu'tni/irx  by  whom 
they  were  siiridunded;  their  only  object  was  to  leut  a 
virliiirlr  in  iidditiou  to  their  own  pitlaiu'e  of  laud.  They 
were  in  fact  eulirely  lost  siurht  of  among  the  nn'tajicrH ;  and 
this  is  the  reason  that  French  writers,  in  their  descriptions 
of  the  so-called  lU'titc  culture  (plot  farming),  never  mak(>  any 
special  mention  of  them,  but  always  confound  them  .rith  the 

1  Rossi,  1.  c. 


CAUSES  OF   THE  FRENCH  REVOLUTION. 


G3 


more  numerous  class  by  which  they  were  surrouiuled.  All 
authorities  arc  agreed  iu  C8tinmtin<f  the  amount  of  land  culti- 
vated in  small  parcels  at  27,000,000  hectares,  while  only 
9,000,000  were  hold  at  a  money  rent.  The  former,  there- 
fore, was  nearly  ecjually  divided  between  the  small  owners 
and  the  mStayer-i,  who  paid  their  rent  in  kind. 

In  France,  at  the  present  day,  nearly  23,000,000  hectares 
are  cultivated  by  small  proprietors  and  metayers;  about 
8,000,000  '  (the  same  as  in  1780)  ijy  tenants  iiayini;  a  money 
rent;  and  rather  more  than  nine  and  a  half  millions  by 
wealthy  landlords.''^  Hence  we  can  clearly  see  what  the 
French  Revolution  has  done  for  French  agriculture.  Not 
only  did  it  create  the  middle  class  of  land-owners,  but 
greatly  promoted  a  more  rational  system  of  tillage.  About 
four  millifm  hectares  have  been  rescued  from  the  petite  cld- 
ture,  and  an  e(puil  number  redeemed  from  utt(3r  barrenness. 
The  breadth  of  land  standing  at  a  mcmey  rent  is  exactly  the 
same  as  before  the  Revolution.  The  increase  is  entirely  in 
the  properties  of  rich  or  sulistantial  land-owners,  who  man- 
age their  own  estates,  —  whicli  indicates  a  change  to  more 
zealous  industry,  coui)led  with  the  employment  of  greater 
capital.  Tlie  extent  occupied  by  the  mStaijerx  is  still  very 
great,  and  the  condition  of  those  who  are  subject  to  it  but 
little  improved,  notwithstanding  the  al)olition  of  socage  and 
seigniorial  rights.  It  will  be  one  of  our  most  important 
tasks  to  examine  the  several  events  and  tendencies  of 
the  Revolution  in  relation  to  their  cfTects  on  the  rural 
population. 

If  we  turn  our  attention  to  tl;e  towns  of  ancii'iit  France  we 
find  that  similar  causes  produeeii  cfTects  eorresi)onding  to 
those  we  have;  just  di'scrilxMl.  The  civic  otlices,  to  which 
persons  li:id  formerly  Ix'i'U  elected  by  the  districts  or  the 
guilds,  had  been  fre(iuently  HIKmI  up  by  the  crown  in  the 
seventeenth  century;  and  in  (ho  eighteenth,  tlu^  great  major- 
ity of  them  were  sold  in  hereditary  possession  to  lill  the  cx- 

'  Qiicsnai,  Turpnt,  Young. 

s  Oti  tliis  point  LiiUimic,  Chatenuvicux,  and  Cochut  are  in  tin-  main  agreed. 
Lavcrgnt's  figures  are  somewhat  diftcrent,  but  the  general  result  is  the  same. 


tP 


64 


ECONOMIC  HISTORY. 


fHf 


Hi 


cheqticr.'  The  government  of  the  towns,  therefore,  was  in 
the  hands  of  a  close  corporation  consisting  of  a  few  families, 
who,  generally  speaking,  allowed  themselves  to  lie  infected 
with  the  indolent  and  self-seeking  sj)irit  of  the  central  gov- 
ernment. Associated  with  these  were  the  families  of  the 
moneyed  aristocracy,  the  memlu-r^  of  the  great  financial 
companies,  the  farmers  of  the  indirect,  and  the  collectors  of 
the  direct,  taxes,  the  shareholders  of  the  trading  monojiolies, 
and  the  great  i)ankeru.  These  circles,  too,  were  either  le- 
gally or  virtually  closed  to  the  general  world.  The  hourise 
was  ruled  by  an  aristocracy,  to  which  only  birth,  or  the  per- 
mission of  government,  could  give  access.  Their  activity 
was  of  course  nceessarily  centred  in  Paris.  Indeed,  they 
stamped  their  own  character  on  tliis  city  to  a  degree  which 
would  be  impossiide  in  our  age,  notorious  though  it  bo  as 
the  epoch  of  the  rule  of  paper.  Every  one  knows  to  what 
a  dizzy  and  ruinous  height  8tock-jobl)ing  was  carried  by  Law 
in  the  beginning  of  the  century;  and  from  that  time  forward 
its  operations  were  never  suspended,  and  all  who  luid  wealth 
or  cre'lit  engaged  in  it  with  reckless  greediness.  Kings, 
nobles,  ministers,  clergy,  and  parliaments,  one  and  all,  took 
part  in  these  transactions;  and  the  chronic  delicit,  autl  in- 
creasing debts,  of  the  treasury  alTorded  constant  opportuni- 
ties of  ".iV-olving  the  State,  and  making  a  profit  out  of  its 
embarrassments.  We  may  confidently  assert  that,  as  com- 
pared with  the  present  diiA',  the  speculative  swindling  of  that 
age  was  as  prevalent  and  as  shameless  as  its  immorality. 
Paris  was  not  at  that  time  a  manufacturing  town,  and  its 
wholesale  trade  was  insignificant;  with  few  except i(ms, 
therefore,  the  industry  of  the  city  consisted  in  retail  trade 
and  the  negotiation  of  l)ills  of  exchange.  It  is  not  the  least 
characteristic  featuie  of  the  indolent  and  selfish  licentious- 
ness into  which  the  higher  classes  of  a  great  nation  had 
fallen,  that  of  all  securities,  life  annuities  were  most  in 
favor;  by  m(>ans  of  which  the  purchaser  procured  liigh  inter- 
est for  himself,  while  ho  robbed  his  children  of  the  capital. 

'  Dcpping,  "  Corrcspondiince  administrative  de  Louis  XIV.,"  vol.  ii.,  Intro- 
duction. 


t  ; 


[\\\ 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


65 


The  trade  and  commerce  of  the  whole  empire  was  fettered 
hy  the  restrictions  of  guilds  and  corporations.  The  |)rinci- 
ples  on  which  they  were  conducted  dated  from  Henry  111., 
who  was  the  first  to  promulgate  the  pro|tosition  that  the  king 
alone  can  grant  the  right  to  labor, — a  maxim  which  con- 
tains the  whole  doctrine  of  the  socialists  from  a  monarchical 
point  of  view.  The  masters  of  every  handicraft  managecl 
its  internal  affairs,  allowed  no  one  to  practise  it  who  did 
not  belong  to  their  guild,  and  ailmitted  no  one  to  their 
privileges  until  he  had  passed  an  examination  of  his  iiuali- 
lication  Ijefore  themselves.  Originally  many  trailes  were 
free  from  this  organization,  until  these  too  were  injuriously 
affected  by  (he  financial  necessities  of  the  State,  —  when  the 
exclusive  rights  of  a  guild  were  sold  to  the  artisans,  as  their 
olTices  were  to  the;  jmlges.  The  government  soon  further 
proceeded  to  divide  each  trade  into  several  guilds,  and  made 
an  exchisive  cor])oration  of  the  most  insignificant  occupa- 
tion. Thus  the  workers  in  ebony  were  ilistinguisheil  from 
the  carpenters,  the  sellers  of  old  clothes  from  the  tailors, 
and  the  pastry-cooks  from  the  bakers.  The  fruit-women  and 
flower-girls  formed  separate  exclusive  associations,  re<rplated 
by  formal  and  liinding  statutes.  In  the  guilds  of  the  seam- 
stresses, eml)roiderers,  and  dress-makers,  only  men  were 
admitted  to  the  privileges  of  masters.  A  number  of  these 
statutes,  by  imposing  excessive  fees  and  duties,  rendered  it 
douldy  dillicult  for  an  apprentice,  liowever  eapalile,  to  obtain 
the  rank  of  master.  Other  enactments  only  admitted  the 
sons  of  masti'rs,  or  the  second  husliands  of  the  widows  of 
masters,  to  the  privil(>ges  of  the  guild.  In  short,  the  power 
of  the  State  was  alnised  in  the  most  glaring  manner  for  the 
furtherance  of  exelusiv<>  class  interests.  Those  who  did  not 
Indong  to  this  aristocracy  of  trade,  could  only  support  them- 
selves by  the  labor  of  their  hands,  in  a  state  of  eternal  servi- 
tu<le.  Despair  and  famine  drove  the  peasants  from  the 
country  into  the  towns,  where  they  found  no  employment 
open  to  them  but  that  of  day-laborers.  The  important  intlu- 
ence  which  this  system  exercised  over  the  State  was  clearly 
understood,  both  by  the  privileged  and  the  excluded  classes. 

6 


i 


iP 


■n'P 


m 


■ 


66 


ECONOMIC  HISTORY. 


I 


I.' 

( 

I 


When  Tiirgot  abolished  the  gtiikls  in  1770,  the  parliament  of 
Paris,  the  princes,  peers,  and  doctors,  unanimously  declared 
that  all  Frenchmen  were  divided  into  close  corporations,  the 
links  of  a  mighty  chain  extending  from  the  throne  to  the 
meanest  handicraft;  and  that  this  concatenation  was  indis- 
pensable to  the  existence  of  the  State  and  of  social  order.  It 
was  not  long  before  the  guilds  were  re-established  in  accord- 
ance with  this  declaration ;  we  shall  see  how  the  journeymen 
and  apprentices  replied  to  this  unctuoi.s  manifesto  some 
fifteen  years  later. 

The  great  manufacturing  interests  of  the  country  were 
confined  by  the  same  narrow  restrictions.  Since  the  time  of 
Colbert,  who  was  the  real  creator  of  them,  manufactures  had 
been  the  darling  child  of  the  government;  and,  as  is  usually 
the  case  with  darling  children,  had  been  petted  and  tyran- 
nized over  at  the  same  time.  When  Coll)ert  began  his  oper- 
ations France  produced  neither  the  finer  kinds  of  cloth  nor 
stockings,  neither  silks  nor  glass,  neither  tar  nor  soap. 
The  previously  existing  handicraft,  which  had  been  for  a 
century  in  the  fetters  of  the  guild,  had  d(me  so  little  to  de- 
velop the  native  manufacturing  talent  of  the  country  that  the 
minister  was  obliged  to  introduce  Oerman,  Swedish,  and 
Italian  workmen.  To  secure  a  sale  in  foreign  eounti-ies  he 
prescribed  with  great  exactness  the  sort  of  fabric  which  he 
wished  to  be  produced;  and  to  prevent  competition  from 
without,  he  enacted  a  number  of  prohiltitory  and  firoteetive 
duties.  Here,  again,  the  power  of  the  State  intruded  itself 
into  the  sphere  of  private  business,  to  the  advantage  of  the 
manufacturer  and  the  injury  of  the  consumer.  TIi(>  same 
system  was  continued  by  his  successors  with  still  worse 
effects,  because  it  was  carried  out  with  all  the  fickleness  and 
irregularity  of  Louis  XV. 's  government.  It  is  true  that 
manufacturers  made  great  progress,  and  increased  their 
annual  products  six-fold  from  the  time  of  Colix'rt  to  that  of 
Necker. '  But  tlie  statutes  liecamo  more  oppressive  every 
year;  every  new  invention  and  imi)rovement  was  excluded 
by  them;  and  after  17<'>0  no  legislation  could  keep  pace  with 

'  Tliis  was  the  proportion  in  tlie  woollen  manufacture. 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


67 


the  proj^ross  of  maoliincry.  Manufacturers,  therefore,  as  is 
everywhere  the  case  under  such  circumstances,  no  hmger 
adapted  themselves  to  the  natural  wants  and  capacities  of 
men,  but  immediately  took  an  artificial  and  aristocratic 
direction.  Durinj]^  Colbert's  ministry,  while;  only  <50,-100 
liands  were  employed  in  the  manufacture  of  wool,  no  less 
than  17,300  were  enjjjaged  in  lace-makinnf ;  and  a  hundred 
years  later,  while  the  manufacture  of  soap  only  produced 
18,000,000  of  francs  a  year,  that  of  luiir-powder  was  esti- 
mated at  not  less  than  24,000,000.  The  contrast  between 
the  aristocratic  luxury  of  the  rich  and  the  uncleaidy  in- 
di<j;ence  of  the  populace  can  hardly  be  more  glarinjrly 
displayed.  Asfrieulture  experienced  in  every  way  the  dis- 
advantaues  of  a  system  which  crippled  communication  with 
foreiirn  countries,  raised  the  price  of  farminjr  implements, 
and  injuriously  affected  the  home  trade.  In  their  easrerness 
to  protect  manufactures  the  government  had  learned  to  look 
on  the  interests  of  agriculture  as  of  secondary  importance. 
They  accustomed  themsidves,  like  the  modern  soeialists,  to 
apply  the  word  proplc  exclusively  to  th(>  mnnufiu'turing 
classes  in  the  towns;  and  though  they  sacrificed  the  interests 
of  the  latter  in  a  thousand  ways  to  the  privileged  monopolist, 
yet  |)liilanthropy  and  love  of  quiet  co-operated  in  inducing 
them  to  supply  the  necessities  of  the  poorer  artisans,  at  the 
cost  of  the  agricultural  ])opulation.  As  supplements  to  the 
protective  and  |)rohibitory  duties  in  favor  of  manufactures, 
decrees  were  issued  fori)idding  the  exportati(m  of  corn  and 
other  raw  agricultural  products.  By  these  artifices  the  price 
of  the  hectolitre  of  wheat,  which  on  the  average  is  at  present 
nineteen  to  twenty  francs,  was  in  17(54  forced  down  to  less 
than  eight  francs.^  Choiseul  then  opened  the  tra<le,  and  the 
jirice  rose  to  more  than  fifteen  francs.  A  similar  result 
followed  the  same  measur<>  in  177'),  durinir  the  ministry  of 
Turgot;  but  a  return  to  protecti<m  reducctl  the  jirlc*'  once 
more  to  twelve  and  three  fourths  francs,  until  the  Revolu- 
tion. The  city  artisans  had  tolerably  cheap  bread,  but 
nowhere  in  the  kingdom  were  the  farmers  prosperous.     In 

*  Mulicr,  in  vol.  x.  of  tlie  "  JK'nioircs  (lu  rAcadiSrnic  royale  de  Mcdecinc." 


P 

\ 


■m 


68 


ECONOMIC  niSTOliV. 


h  ' 


k'i 


Spite  of  the  most  violent  complaints  from  all  tlio  provinces, 
the  cause  of  the  evil,  and  conseiiiiently  the  evil  itself,  re- 
mained nnehiin^ed.  The  govornment  adhered  to  the  convic- 
tion that  it  was  their  immediato  duty  to  provide  for  the 
maintenance  of  the  population  of  the  towns.  It  seemed  to 
them  a  mailer  of  course  that  the  State  should  use  its  political 
power  for  the  advantage  of  its  rulers  and  Iheir  favorites. 
No  one  considered  the  remoter  consequences  of  such  a  prin- 
ciple; no  one  asked  the  (juestion,  "  What  if  this  power  should 
fall  into  democratic  hands  't  " 

Let  us  endeavor  to  obtain  a  general  view  of  the  Aveallh  of 
France  at  this  period.  From  the  imperfection  of  ollicial 
information  the  task  is  a  dillicult  one,  and  its  results  uncer- 
tain. Even  nn  approximation  to  llu;  ti-uth,  however,  will  not 
he  without  interest,  since,  in  order  not  to  hring  forward  un- 
meaning figures,  we  shall  constantly  institute  a  comparison 
with  the  now  existing  state  of  things. 

The  well-informed  Tolosan,  the  imly  authority  on  this  sub- 
ject, estimates  the  total  produce  of  manufactures  at  nine  hun- 
dred and  thirty-one  million  francs  ;  that  of  handicraft  at 
sixty  millions.  At  the  present  day'  the  manufactures  of 
Eastern  France  alone,  not  reckoning  handicraft,  produce 
2,282  millicms;  the  sum  total  therefore  has  been  at  least 
quadruple*!.  At  the  former  ])eriod  it  amounted  to  thirty- 
nine  francs  |)er  head  of  the  whole  population;  at  ])rescnt  wc 
might  unhesitatingly  ])lace  it  at  more  than  one  hinu^red  per 
head.  The  emancipation  of  the  internal  trade  since  1781)  has 
not  raised  the  amount  of  |»roperty  produced,  but  —  what  has 
so  often  been  called  in  question  —  has  favorably  inliueneed 
the  manner  in  which  it  is  distribute*!.  The  daily  wages  of  the 
manufacturing  laborers  in  1788,  according  to  a  rather  high 
estimate,  were  for  men  twenty-six  sous,  and  for  women  fif- 
teen.''^ They  are  now,  according  to  the  most  numerous  and 
trustworthy  observation,  forty-two  sous  for  men,  and  twenty- 
six  for  women.     The  daily  wages  of  the  agricultural  laliorers, 

1  In  18.J.S.     In  IftOOatnfnl  of  five  milliards  was  reached.     Boitoau,  "  ttat 
de  lii  France  en  1T8'J,"  pr.  T.OO. 
^  Boiteau  thinks  I'J  tu  20  sous. 


CAUSES  OF  THE  FRENCH   REVOLUTION. 


G9 


too,  can  cortainly  not  be  reckoned  at  more  than  fifteen 
sous*  for  the  year  1780,  or  less  tliau  twenty-live''^  in  the 
l)n'sent  day.  If  wo  further  talve  into  account  the  very  eon- 
sidcrablc  increase  in  the  number  of  wcn-kinir  days,  arising 
from  tlie  al»olition  of  tliirty  holidays,  we  sluiil  lind  tlie  annual 
wauvs  of  the  earlier  period  to  be  little  more  than  half  what 
they  now  are,  naiiudy,  three  hundred  ami  lifty-one  francs  for 
the  jnanufacluri.ifj;,  and  one  hundred  and  lifty-seven  for  the 
ajrricultural  laborer,  against  six  hundred  and  thirty,  and  three 
hundred  at  tlo  present  day.  To  appreciate  the  siguilicance 
of  these  resiJts  we  must  compare  tlu;  prices  of  provisions  nt 
these  two  )  criods.  It  appears,  then,  that  before  \1H\)  l)read 
was  consii'ered  very  cheap  at  three  sous  per  pound,  and  it 
was  only  in  Paris  that  this  rate  was  a  commcm  one;  in  the 
jiroviuccM  the  price  was  generally  higher.  In  our  own  times 
the  ave.age  price  for  the  whole  of  France  from  1820  to  18-10 
was  SI  venteen  centimes,  while  at  Paris,  in  l8.jl,  it  was  four- 
teen x-ents,  —  less,  therefore,  than  the  old  rate  of  three  sous. 
This  seems  out  of  proi)ortion  to  the  price  of  corn,  since  the 
hedoUtre  (»f  wheat  in  1780  cost  from  twelve  to  thirteen 
francs,  and  in  1840  from  nineteen  to  twenty.  This  ap|»arent 
int'ongruiiy,  however,  is  acenunted  for  by  the  improvement 
in  the  method  of  grinding  and  baking,  by  which  a  third,  or 
even  a  lialf,  more  weight  of  bread  is  now  obtained  from  the 
same  (pumtity  of  corn  than  in  the  former  period."'  We  lind, 
theref(»i'(>,  that  the  laborer  received  for  his  wages  little  more 
than  half  the  quantity  of  bread  which  the  modern  workman 
can  obtain  for  what  he  earns.  The  same  proportion  holds 
good  in  other  kinds  of  food,  and  in  regard  to  clothing  the 
comparisim  is  still  inorc  unfavorable  to  the  untc-rcvolutionary 
period. 

We  shall  discover  the  determinate  cause  of  these  difl'er- 
ences  when  we  come  to  consider  the  main  wealth  of  the 
French  empire, —  the  produce  of  the  soil  in  the  widest  sense 


K 


I'M 


m 


■eV] 


1  Lavcrgno  says  30  sous  (p  o7). 

*  Bi'fore  178!)  tlie  seplicr  (240  pounds)  of  wheat  yielded  only  180  pounds  of 
hrcad.  —  Moniliur,  12. July,  17U2,  supploinent. 

8  Young,  "  Assciuble'e  Nationale,"  15th  Jan.,  1700,  11th  Aug.,  1791. 


'^m 


70 


ECONOAU C  Ills TOU  Y. 


ol'  the  word.  It  would  carry  us  too  far  if  we  wore  to  examine 
every  hrancli  of  the  sultjeet,  and  discuss  all  the  dilliculties 
c.oinieeted  with  it;  it  will  he  sunicieiit  to  dwell  on  a  few  of 
the  principal  points  of  interest.  Of  wheat,  the  p:reat  stall' 
of  life,  the  soil  of  France  produced  hcfttrc  the  Revolution 
uliout  40,000,000  hectolitres,  or  one  hundred  and  sixty-seven 
li/reH  per  head  of  the  population;  and  in  1S4U,  70,000,000,  or 
two  hundred  and  eight  litres  per  head.  At  the  former  period 
the  numljer  of  cattle  was  calculated  at  iJ;3,000,OUO  head,  and 
at  the  present  day  at  4'J, 000,000;  and  there  is  an  «'(|ual  in- 
crease in  the  number  of  the  other  domestic  animals.  The 
vineyards  formerly  yielded  27,000,000  hectolitren,  and  at 
present  37,000,000,  so  that  the  |>n)portion  per  head  is  at  any 
rate  not  lower  than  it  was.*  And  if  we  take  into  considera- 
tion that  a  number  of  useful  agricultural  jtroducts  were  at 
that  time  unknown,  that  a  violent  controversy  was  carried 
on  about  the  wholesomeneas  of  potatoes,  that  the  forests 
were  allowed  to  run  to  waste  far  more  than  at  the  present 
day,'*  we  shall  not  be  astonished  that  the  iDcst  statist  of 
modern  France  estimates  the  vegetable  product  of  the  French 
soil  (which  now  exceeds  in  value  the  sum  of  0,000  millions) 
at  not  more  than  2,000  millions  at  the  period  before  the  Revo- 
luticm.'''  The  imp(}rtancc  of  this  fact  is  sufliciently  evident; 
and  we  may  gain  an  idea  of  the  state  of  the  population  before 
1789  by  remembering  that  even  now  the  total  consumption 
of  food  i:.  France  is  not  greater  in  proportion  to  the  popula- 
tion than  in  Prussia,  and  much  less  than  in  England.* 

Respecting  commerce,  the  third  great  branch  of  natiimal 
wealth,  I  have  but  little  to  say.  I  am  not  aware  that  any 
statistical  data  exist  of  the  internal  trallic  of  France  before 

'  Morcau  de  Yonnfcs,  from  contemporary  sources.  I  Imve  followed  liim 
liecatisc  space  does  not  allow  me  to  give  my  reasons  for  thinking  a  niueli  more 
unfavorable  state  of  tilings  in  1770  liintily  probable. 

-  "  Memoire  remis  aux  Notables,  1781 ;  "  Young's  "  Travels,"  2d  ed.  vol.  li. 
p.  100;  Moreau,  "Agriculture,"  ;306. 

8  The  calculation  of  Young  agrees  with  this.  Tolosan,  Dedeley  d'Agier, 
Lavoisier,  make  amounts  higher.  (Boiteau,  "  fltat  de  la  PVance  en  1789," 
p.  481,  compares  their  statements.)  But  the  uncertainty  of  their  calculations 
is  very  perceptible. 

*  Communications  from  the  Prussian  Statistical  Bureaus,  1861. 


i': 


CAUSES  OF   THE  FRENCH  REVOLUTION. 


71 


the  Rt'V(jliili()n;  it  was,  no  doubt,  smiillcr  than  at  the  pres- 
ent (lay,  in  cunseiiuence  of  the  ninltituile  of  inhuid  duties. 
And  with  regard  to  the  foreign  conunerec  of  the  earlier 
period,  we  have  no  means  of  dividing  the  sum  totals  whieh 
lie  Ix'fore  us  into  the  value  of  the  raw  nuiterials  and  the  cost 
of  nianufactun',  on  the  one  luiiul,  and  the  clear  profits  of 
trade,  on  the  (ither.  It  must  sullice  us  to  gain  a  genc^ral  idea 
of  the  relation  between  the  two  periods  from  the  sununary 
statement  that  in  the  custom-house  registers  immediately 
i)efore  the  Revolution  the  annual  imports  are  stated  at 
')7»),0()0,0(JO,  and  the  exports  at  .540,000,000,  while  as  early 
as  1830  the  former  amounted  to  905,000,000,  and  the  latter 
to  UtJl, 000,000,  and  in  18o7  both  Imports  and  exports  had 
risen  to  a  value  of  more  than  1,800,000,000.  Taking  all  in 
all,  therefore,  France  under  the  old  mimarchy  was  four  times 
as  poor  in  manufactures,  three  tiuK.'s  as  poor  in  agriculture, 
and  more  than  three  times  as  i)oor  in  conunerce,  as  it  is  in 
the  present  day.  We  must  bear  this  result  well  in  mind 
when  wo  try  to  form  a  judgment  respecting  the  finances  of 
the  ancien  ret/hne.  A  budget  of  six  hundred  milliims 
weighed  as  heavily  upon  the  resources  of  the  country  at  that 
period  as  a  budget  of  1,800,000,000  would  now,  and  conse- 
quently a  deficit  of  100,000,000  was  eipiivalent  to  one  of 
800,000,000  in  our  own  times.  Such  a  deficit  actually 
existed  when  Louis  XVI.  mounted  tin;  tlirone.  It  is  there- 
fore easy  to  conceive  that  his  attention  should  ])e  stnmgly 
turned  to  the  restoraticm  of  the  l)alance  between  income  and 
expenditure,  and  that  his  vain  endeavors  in  this  direction 
should  shake  the  fal)ric  of  the  State  to  its  very  foundatlcm. 

A  whole  volume  would  be  necessary  to  detail  the  dill'erent 
schemes  of  reform  which  were  brought  forward  between  the 
accession  of  Louis  XVI.  and  the  outl)reak  of  tlu;  Revolution. 
It  will  be  sufficient  for  our  purpose  to  notice  the  chief  points, 
whieh  have  an  important  bearing  on  the  antecedents  and  the 
actual  events  of  that  mighty  movement. 

Louis  XVI.  himself,  as  no  one  can  doul)t  who  has  ap- 
proached the  sources  of  the  history  of  this  period,  entered 
on  the  task  of  government  with  a  heart  full  of  j)'ety,  philau- 


|! 


«i-f! 


'4T 


■  riS 


im 


!*■ 


t'  '  i 


72 


ECONOMIC  IIISTOJiy. 


r' 
I, 


\'a 


1 


;     I 


thropv,  and  public  8])irit.  He  waa  earnest  and  pure-minded.. 
penetrated  by  a  sense  of  his  own  dignity  and  the  responsi- 
bilities attached  to  it;  and  firmly  rcsL.ved  to  close  forever 
the  infamous  paths  in  which  his  predecessor  liad  walked. 

j5ut  unhappily,  his  capacity  bore  no  jiroporlion  to  his  jrood- 
will.  Ih'  was  incapalde  of  forniinjr  a  decision;  his  education 
was  deficient;  he  was  awiiward  both  in  person  and  speech, 
and  slow  of  comprehension.  As  he  had  a  very  limited  knowl- 
edge, both  of  the  people  and  the  condition  of  his  empire, 
the  selection  of  his  ministers  wa.s,  from  the  very  outset,  de- 
termined by  accident,  the  iuliuence  of  his  aunts,  his  queen, 
or  the  contending  court  factions;  and  as  he  was  inunovalde 
wherever  morality  waa  concerned,  l)iif  utterly  helpless  in  the 
practical  e.\e<'ution  of  his  ideas,  his  was  just  a  case  in  which 
almost  everythiui":  depended  on  the  aid  of  his  lu'arest  .mI- 
visers.  He  possessed  just  sidlicient  sense  of  justice  and 
benevolence  to  enceurnge  every  effort  for  useful  n-ioiuis,  but 
lacked  entirely  thai  firmness  of  an  enliuhtciUMl  juduirient 
which  knows  how  to  liriuu  about  a  positiv(^  result  in  spite  of 
the  opposition  of  existiu!'  interests.  The  ini'vitablc  emise- 
(piences  soon  showed  themscdves.  Anarchy,  which  uudt-r 
Louis  X\'.  had  reiuned  in  the  minds  of  men,  now  liroke 
forth  into  t)vert  acts.  Tiie  suiTeriiifrs  of  the  peojile,  which 
individuals  had  hitherto  Itttrne  in  silent  apathy,  now  occupied 
the  atteuti<tn  of  the  masses. 

The  same  chance  which  in  his  reign  directed  the  manage- 
ment of  public  business  had  given  him,  as  Ills  lirst  minister, 
Turgot,  the  greatest  reformer  of  the  day. 

This  great  minister's  strokes  fell  heavily  on  the  existing 
svsteiu  in  every  (lii'eclion.  Among  his  measures  we  find  fret' 
trade  in  corn,  al»olitiou  of  the  carr/^f  in  the  eoiiiitry  distriels, 
liberation  of  trade  from  tlu'  IrammidH  of  the  guilds,  tlie  erec- 
tion of  the  riiixsc  t/V^''')»J/<^','  a  number  of  Improvements  and 
alleviations  in  the  modi>  of  raising  the  pul)lic  ta.ves,  and  a 
prospect  held  out  to  all  pos.sessors  of  |»roperty,  of  a  gradual 
increasing  share  in  polilieal  rights;    and  it   is  under  these 

'  An  institution  for  lending  money  for  tlio  furtherance  of  nmiuifiieturea  and 
commerce. 


CAUSES  OF  THE   FRENCH  REVOLUTION. 


73 


heads  that  the  restless  activity  of  this  liberal  statesman  may 
be  best  anaiiired.  We  may  easily  eoiiecive  that  there  was 
scarei'ly  one  of  the  prlvil(';i;('<l  classes  which  did  not  eo  .sider 
its  previous  existence  imperilled. 

Opposition  rose  in  every  ([uarter;  the  courtiers,  the  parlia- 
ments, the  landed  arisloeraey,  and  the  mciulters  of  the  jruilds 
all  threw  themselves  into  an  attitude  of  defence  with  noisy 
zeal.  The  cuntcst  penetrated  into  the  royal  family  itself, — 
Louis's  younjrer  l)rother.  Count  Charles  of  Artois,  a'oused 
the  minister,  who,  he  said,  was  undermining  the  aristocracy, 
the  prop  and  rampart  of  the  throne;  and  a  cousin  of  the  king, 
th  rich  and  almndoned  Philip,  Duke  of  Orleans,  began, 
amid  the  general  uxeitement,  to  play  the  demagi  gu<!  on  his 
own  account.  Then  ft»r  (he  lirst  time  a  specl-.cle  was  seen 
in  I'aris  which  was  subsecpiently  repeated  in  ever  darker 
colors,  —  the  spectacle  of  the  police  authorities  of  the  capital 
stirring  up  the  mnb  against  the  crown,  and  on  this  occasion 
in  the  interest  of  (lie  privileged  classes. 

At  first  Louis  X\'l.  detdared  that  he  and  Tiirgot  were  the 
only  friemls  of  the  people,  and  stood  linn  against  the  parlia- 
ment of  Paris  and  the  street  rioters;  liut  he  was  not  proof 
against  (he  feeltleness  of  his  own  character  and  (he  wi'aring 
inlluence  of  (hose  by  whom  lie  was  dailv  siirroiiiuled.  Af(er 
an  administration  of  nearly  a  year  ami  a  half  Tur^-ot  was 
oi)liged  to  yield  (o  (he  reaction  of  the  (iiifiiu  rrjniif,  and 
almost  all  his  creations  collapsed  at  once.  Then  followed  a 
long  period  of  experiments  and  palliatives,  the  siu'cessors 
of  Turii'ot  woubl  gladly  ha\e  gone  on  in  the  lu'oad  (rack  of 
tradidonal  privileges  if  (heir  increasing  linancial  dillicul- 
ties  had  lef(  them  any  peace.  I(  was  jus(  at  (bis  time  that 
Louis  resolved  to  su|»port  the  North  .\meiicans  against  Kiig- 
laud.  which  he  really  di<l  aL'niiis(  his  own  will  and  (he  views 
of  bis  miiiisteivu  who  dreaded  the  expense  (tf  a  great  war,  and 
clearly  saw  (hat  the  I'muiicipation  of  (he  colonies  would  not 
weaken  l"aiglan<l.  15u(  the  umlelined  Imigiinr  bir  frc'dom, 
and  the  lilx-ral  political  doctrines  whieb  had  taken  ioo(  lar 
and  wide  in  the  laml  prevaile(|  over  (he  scruples  of  (he 
king  and  his  counsellors.     The  .Manpiis  of  fiafayette,  then  a 


(I  i/i 


74 


ECONOMIC  HISTORY. 


.    A 

\  .;>\ 

( 

!■■?■ 


tall,  light-haired  youth,  full  of  vanity  and  ambition,  who,  on 
account  of  his  ungraceful  manners,  had  no  success  at  court, 
fitted  ;»ut  a  ship  at  his  own  expense  and  sailed  across  the 
Atlantic.  A  number  of  inlluential  persons  cried  out  for 
vengeance  upon  England  lor  the  humiliation  sustained  in  the 
Seven  Years'  War;  in  a  word,  the  warlike  party  carri(!d 
their  point,  and  war  was  declared  against  England.  The 
consecjuence  to  Fi'ance  was  a  rapid  spread  of  democratic 
sentiments  on  the  American  pattern.  The  followers  of 
Rousseau  were  triumphant;  here,  they  said,  might  be  .seen  the 
possibility  of  a  democracy  on  a  broad  basis,  —  the  construc- 
tion of  a  State  un  the  foundation  of  the  natural  rights  of 
man.  Another  consecjuence  of  the  war  was  to  tln»w  fresh 
burdens  on  the  public  exclu'(|uer.  The  minister  of  finance 
at  this  time  was  Necker,  a  native  of  Geneva.  Having  come 
to  Paris  as  a  poor  clerk,  he  had  risen  by  his  talents  and  skill 
in  business  to  the  p<jsition  of  a  rich  banker,  and  with  great 
self-complacency  had  made  his  heuse  the  rendt'srouH  of  the 
moie  distinguished  members  of  the  liberal  party.  By  his 
intiuence  with  the  bourse  he  procured  a  certain  degree  of 
credit  for  the  State,  and  raised  loan  after  loan  to  the  amount 
of  five  hundred  millions,  without  any  increase  of  the  taxes, 
or  any  provision  for  a  li(|ui(lation  of  the  debt  incurred. 
This  was  evidently  sacrificing  the  future  to  the  present,  since 
the  deficit  became  larger  every  year,  as  the  interest  of  the 
public  debt  increased.  Necker  had  the  real  merit  (jf  bring- 
ing some  of  the  departments  of  finance  into  better  order;  ho 
enjoyed  for  the  time  being  unbounded  po])ularity,  and  basked 
with  delight  in  the  universal  acknowledgment  that  he  was 
the  greatest  statesman  in  Europe.  Public  confidence  was 
freely  given  to  a  minister  \\\.  endeavored  to  found  his  ad- 
ministration on  credit  alone,  —that  is,  on  the  confidence  of 
mankind.  lie  was  looked  on  as  a  perfect  hero  when  he 
introdueeij,  with  good  results,  provincial  assemljlies  into 
Berry  and  Guienne,  and  soon  afterwards,  breaking  through 
all  the  traditions  of  the  ancient  mtmarchy,  published  a  de- 
tailed, but  unfortunat(dy  very  inexact  and  highly  colored 
report  on  the  slate  of  the  finances.      But  as  he  nowhere  laid 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


75 


the  axe  to  the  root  of  the  evil,  he  only  roused  a  nuiubor  of 
powerful  Interests  by  his  attempts  at  innovation,  but  was 
utterly  uiuible  to  elose  the  source  of  linaneitil  confusion. 
lie,  too,  soon  saw  no  other  means  of  recovt-ry  hut  limitation 
of  the  budf^et,  and  economy  in  the  expenses  of  the  court ;  l)y 
avowing  which  he  nuide  himself  hateful  to  all  the  grandees 
of  the  ant'  haniber,  and  was  deprived  of  his  ollice  in  May, 
1781.  Aftc.  "^wo  insignificant  and  inexpcrionecil  ministers 
had  cxhauated  their  strength  in  the  years  innnedialely 
following,  the  intendant  of  Ijille,  the  gifted  l)ut  frivolous 
Calonne,  was  called  to  the  lii'lni.  lie  began  with  the  pr(»po- 
sition  that  whoever  wi.shed  for  credit  must  eidlivate  hixurv; 
and  he  renewed  the  prodigality  of  the  court  in  tiie  style  of 
Louis  XV.  After  nuitters  bad  gone  on  in  this  juljilant 
course  for  some  years,  and  the  pul)lie  debt  had  been  increased 
by  four  hundrecl  millions,  and  the  taxation  l)y  twenty-one 
millions,  the  ruin  of  the  country  lieeame  palpable  at  the  be- 
ginning of  the  year  1787,   and  tlie  catastroplu;  ini'vitaltle. 

Let  us  here  cast  a  glance  ut  the  budget  of  the  (iitcir/i 
r^ijime,  the  disorder  of  which  was  to  give  the  signal  of  con- 
vulsion to  '"v  (juarter  of  the  civilized  world.  After 
Necker  an  ;  ('■<]  .nne,  the  Notables  and  tlie  Revolution,  liave 
quarrelled  about  its  contents  with  eipial  meuilacity,  tiiis 
budget  now  lies  in  its  most  secret  details  before  the  eyes  of 
the  historical  inquirer.' 

And  first,  with  icgard  tr)  the  national  income,  which,  as 
is  well  i<nown,  amoimted  to  about  live  hundred  millions  be- 
fore 17H1),  nearly  eight  buiidred  under  Napoleon,  and  then 
increased  during  tiie  period  lietween  181^.  mkI  1S48  to  1,500 
million  francs.  However  delinite  tluwe  figures  may  appear, 
we  can  by  no  means  draw  a  coixdusion  from  tliem  as  to  the 
(dieapness  of  tlu;  respe<'tive  modes  of  t'overnuient  alxtve- 
mentioned.  We  have  already  observeil  that  in  proportion  to 
the  national  wealth  a  taxation  of  (ive  bundrrd  millions  i)e- 
fore  1780  would  l)e  about  eipiivalent  to  one  of  1,000  millions 
at  the  present  day.  In  the  i\e\t  |tlaee,  we  nnist  make  several 
additions  to  the  round  sum  of  live  hundred  millions. 

1  Bnilly,  "  Hist,  flimiic.  du  la  Franco,"  ii.  278. 


70 


ECONOMIC  UlSrORY. 


'1    i' 


The  income  of  the  State  in  tlic  yeiir  ITSo  was  calculated 
at  live  Imiulred  and  fifty-eight  millions,  to  which  wero  added 
forty-one  millions  more  for  the  local  administration  of  the 
provinces,  a  sum  which  was  never  paid  into  the  treasury,  hut 
immcdiatily  exi-cndcd  in  the  dilTercnt  places  where  it  was 
raised.  Thus  we  find  that  (he  nation  was  hearinu;  an  annual 
bui'di'U  of  fi'oni  live  hundred  and  ninely-nine  to  six  hundred 
millions.  At  the  same  time  the  Church,  whose  expenses  no  ; 
liguie  in  the  hud<ret  of  the  State,  rai.^ed  one  hundied  and 
thirty-three  millions  in  tithes,  and  sixteen  millions  in  other 
dues  and  olTerin^fs.'  The  fees,  which  servnl  as  a  compleuicnt 
to  the  judicial  salaries,  auKtunted  to  twenty-nine  millions;''* 
the  seigniors  raised  al>out  :2,r)00,00(.)  in  tolls  of  various  kinds, 
and  at  least  87, 000, 000  in  stamp  duties.''  1  pass  over  the 
feudal  rents  and  services,  the  valuation  of  which  is  quite 
impossiltle.  These,  from  their  very  nature,  eaimot  l»e  taken 
into  account  in  speakinirof  the  puldie  Ijurdens,  ami  nuiy  very 
well  lie  set  olT  against  the  mortgage  delits  of  the  modern 
peasant   proprietors. 

'I'he  items  already  mentioned,  however,  in  addition  to 
some  of  a  similar  character,  amounted  to  two  hundred  and 
eighty  millions,  so  that  the  Fri-nch  people  had  at  that  period 
to  hear  a  tutal  annual  taxation  of  eight  himdred  and  eighty 
millions.  11  we  compare  this  sum  with  ihe  national  wealth, 
we  may  unhesitatingly  set  it  down  as  e(|uivalent  to  an 
amount  of  "J, 400  millions  at  the  present  day;  i*  follows, 
therefore,  that  fi'om  the  time  of  Louis  XV.  to  that  of  Napo- 
leon III.  there  existed  hut  one  governnu>nt  in  France  which 
appropriated  to  its(df  a  still  larger  proportion  to  the  puldie 
income  tliai!  the  anci'cn  nv/Zz/fc,  and  that  one  was  the  govern- 
ment of  the  .Facohins  during  the  Heign  of  T;  i  ror.  The 
Kmpire,  the  Restoration,  and  lionis  Philippe  contented  them- 

1  Louis  T'liuic,  I)  iii  c.  H,  fstimatcg  them,  aci-onling  to  other  nutlioritic*. 
not  nt  Kt,  )ii:t  at  :>0  millions. 

'  Aci'ordiiitt  to  otlicr  rgtimntes, -12  niiliions.  Boitonu,  "  fttnt  dc  la  I'Ynnco  I'H 
1781."     Paris,  IHOl. 

'*  For  the  !<aki'  of  lirivity  I  ii«i>  this  term  to  denote  all  the  fees  paid  on  clmnge 
of  property,  *  (j  ,  hds,  relvds,  ijiiir.ls,  etc. 


'^^ 


CAUSES  OF  THE  FllENCIl  REVOLUTION. 


n 


selves  with  far  HinallfM'  sums;  hero,  too,  fcudulioiu  finds  its 
counterpart  anionj;  the  socialists. 

When  we  incjuire  into  the  distribution  of  these  taxes 
amontr  the  dilVerent  classes  of  the  people,  wo  disccjver  a  j^hir- 
inj^  inecpiality.  The  higher  ranks  were  not  indeed  exempt 
from  taxation,  htit  they  were  in  many  respects  favored.  Of 
the  taxes  on  consumption,  which  were  valued  at  three  him- 
dred  and  eiiiht  millions,  they  l)ore  of  course  a  full  share;  but 
of  the  land  and  capitation  taxes  (one  hundred  and  seventy- 
one  millions)  they  ought,  as  was  discovered  during  the 
Revolution,  to  have  paid,  on  a  fair  distril'Mtion,  thirty-three 
millions  more  than  they  actually  did.  In  the  next  place 
the  maintenance  of  the  public  roads,  which  were  entirely 
kept  up  l>y  means  of  the  mrvci',  at  a  cost  of  twenty  millions, 
and  further,  the  expenses  of  the  provincial  militia,  aliout  six 
and  one  fourth  millions,  rested  entirely  on  the  shoulders  of 
the  lower  classes.  If  we  take  into  consideration  the  forty 
millions  ijuoteil  aliove,  which  the  seigniors  received  fntm  the 
peasants,  the  fact  that  the  poorer  classes  of  every  town  were 
respiriisiide  for  the  taxes  of  their  rommunc,  even  when  their 
rich  i'ellow-citi/ens  escaped  payment  Ity  the  purehase  of 
privileged  oilices,  and  lastly,  the  scandalous  unfairness  in 
the  imposition  of  the  tax.'s  on  consumption  to  whieh  the 
helpless  multitude  was  sui)jected  by  their  superioi'S,  we  shall 
easily  umlerst'ind  the  triumphant  fury  with  which,  in  17Si>, 
the  pciisiints  luore  espei'inlly  received  the  joyful  int(dligencc 
of  the  utter  destruction  of  the  system  above  descril)ed. 

(treat  as  was  the  proportion  which  it  exai'ted  of  the  national 
income,  tiie  government  found  its(df,  nevertheless,  in  a  state 
of  ever-increasing  need  and  embarrassment.  Disorder  on  the 
one  side  and  sellishness  on  the  oth(  r  seiitti'ri'd  its  t re:isui"es 
to  the  wind.  'Ihe  case  was  the  sjime  in  the  linancial  aiii.iin- 
istration  as  in  that  of  justic';  no  one  had  ever  tried  to  or- 
giuii/.e  it  on  any  grant  principle  of  wise  adaptation  to  the 
end  in  view;  on  the  contrary,  a  number  of  isolated  jurisdic- 
tions, (listinguisluMl  from  i»ne  another  accoi-ding  to  provinces 
or  sources  of  income  or  the  destination  of  the  funds  in  tpu's- 
tion,    existed    side    by   side,    inter'   riuL'    with    ea(d\    other'h 


,^  n 


t  ■  I . 


}!  i 


78 


E  COSOMI C  Ills  TOR  V. 


•M 


i 


f 


oporationa  and  drstroyiii}?  all  rosponailiility.  The  amount  of 
arrears  due  the  treasury,  e(iual  perhaps  to  half  the  anjuial 
hiid^'et,  not  even  the  Ilevohition  has  l»een  able  to  ascertain, 
and  it  eould  only  jret  hold  of  the  prolits  of  the;  farmers  of  tlio 
revenue  Ity  means  of  the  <ruillotine.  When  onee  fauiiliari/.ed 
with  deficits  the  irovernment  soon  fell  iuto  the  stream  of 
floating  del)ts.  The  anticipation  of  the  ri'venue  (if  future 
years,  at  a  usurious  discount  paid  to  the  (collectors  them- 
selves, the  puttin<r  olT  the  payment  of  deitts  which  had  fallen 
due,  and  the  omission  of  expenditure  pnvserilK'd  liy  law, 
were  the  cause  of  etiually  enormous  losses,  when  the  day  for 
liipudation  at  last  arrived.  How  wid<'ly  this  confusion 
spread  iu;iy  he  gathered  from  tlie  actual  cash  ae(V)unts  of  the 
year  ITi^'o.  I>y  the  side  of  the  rcLndiir  iiu-ome  of  the  treas- 
ury, of  not  (juite  three  hiuidred  and  lifty-seveu  millions, 
there  is  aii(»ther  accijtinl  of  four  hundred  and  uiuety-lhree 
millions  iucouie  and  four  hundred  and  seven  millions  ex- 
penditure, cousistiuir  of  items  which  helonj;  eithci-  to  the 
earlier  or  hiter  years  of  the  period  between  ITHl  iuid  17M7; 
so  that  the  siiui  total  amounts  to  tieaily  eight  hiuidred  anil 
fifty  millions.  We  see  what  a  field  was  opene<l  to  speeiila- 
tora  and  the  lovers  of  plunder,  and  to  what  a  state  siadi  pro- 
ceedings liiid  reiluceil  the  prosperity  of  an  empire  wliiidi,  a 
hundred  veins  earlier  aiul  twenty  years  later,  dictated  its 
will  to   Kiiropc  iis  a  law. 

The  hist  feature  iii  this  State  economy  Avhieli  reveaU  to  us 
ils  character  is  the  kind  of  expeiiditiin-  in  which  these  trt^aa- 
ures  collecte(l  with  so  much  ditliciilty  were  employed.  The 
expenses  <if  the  court  were  stated  in  the  .dlicial  budget  at 
thirty-three  or  thirty-live  millions,  Imt  they  were  in  reality 
forty  millions,  which  ilid  not  include  the  roynl  liiiutiiig  ex- 
iM-ditions  and  journeys,  tlie  salaries  of  the  great  ollicera  of 
the  court,  or  the  maintenance  of  the  rov;il  palaces.  The  war 
oflice,  the  cost  of  which  Xt  cker  states  at  ninety-nine  millions 
and  ("mIoiiiic  at  one  himdred  and  fourteen  iiiillions.  received 
one  loiudred  iiiid  tli'ity-oue  millions,  of  which  rather  more 
than  thirty-nine  millions  went  to  the  administration,  forty- 
four  millions  lor  the  pay  and  commissariat  of  the  troops, 
and  foriv-six  millions  for  the  salaries  of  the  ollicera. 


CAUSES  OF  THE  FllEXCII  REVOLUTION. 


79 


Knlircly  icmovcd  from  all  inini.stcrial  calculation  were  the 
money  orders  of  the  kin)^  himself  "for  presents,  etc.,  to 
courtiers,  to  tlie  minister  of  finance  and  nmgistrates;  repay- 
ment of  foreii^n  loans;  interest  and  discount  to  the  treasury 
ollieials;  remission  of  certain  personal  taxes,  and  iniforcseen 
expenses  of  every  kind."'  This  class  of  expenditure,  which  is 
well  chara(!teri/.ed  hy  the  ahove  headinir,  amounted  in  ITS') 
to  one  liun<lreil  ami  thirty-six  millions;  in  other  years  the 
sum  was  rather  smaller;  l»ut  we  may  fairly  assume  tlii't  the 
annual  avernir<' was  more  than  one  hundred  millions. '  And 
while  we  thus  see  nothini^  l)ut  uljundance  and  superliuity 
anion;/  the  hiixhest  classes  of  society,  the  itridjres  and  roads 
are  only  set  down  at  four  millions;  the  puldie  huildings  at 
scarcely  two  miilion.s,  and  th((  scientific  institutions  at 
rathi'r  more  than  one  million;  for  which  olijects  the  Imdfijet 
of  lS;):i  iind  the  followiinr  years  ^'ranted  fifty-nine  millions! 
The  hospitals  and  fouiidlinu;  institutions  received  six  millions 
from  tlie  .>^tate,  six  from  the  Church,  and  had  a  revenue  of 
twenty-l'oiir  millions  of  their  own;  while  the  i)enevolent  in- 
stitutions of  moilern  France  (IS."):])  had  an.  annual  sum  of  one 
hiiiidrcil  and  nineteen  millions  at  their  disposal.  In  short, 
whatever  portion  of  the  financial  aiVairs  of  this  feudal  state 
we  iiivi  sti irate,  we  arrive  at  the  same  ri'sult,  and  find  the 
people  separated  into  two  jri'eat  clas.se8,  one  of  which  was 
enriched  at  the  cost  of  the  other. 

Ihit  as  every  such  draininir  of  the  wealth  of  a  nation  Itears 
within  itseP'  the  trerms  of  ruin,  liy  tlryiuir  up  on  the  one 
hand  the  sources  of  income,  ami  increasinir  on  the  other  the 
passion  for  extravairance,  the  irovernment  found  itscdf  at  the 
end  of  17S(!  in  the  followiiiur  condltifui:  the  retriilar  anniiiil 
incoiiie   was  three  hundred    and  twenty-seven   millions;    the 

annual    expenditure     nccordinir    to     the    treasury    ac iints 

amounted  to  three  hundred  ami  forty  millioiis;  in  addititm 
to  this  there  were  twenty-seven  millions  for  pensions  and 
seventy-two  millions   of  nrtrent   aii-ears  ""rom   former  years; 

'  \Vi'  arrive  nt  tliis  rosiilt  from  tlio  dclmtt  ^  of  lln'  "  Afscinlilrc  Constini- 
antc  "  (in  April,  IT'.W))  on  tlip  ppiisions,  tlie  ordnuiiiiti-es  li  rnwiitnnt,  and  tliu  /iit«! 
rmige.    Louis  Illanc  gives  a  nunil)cr  of  details  from  tlu'sc  in  b  iv.,  c.  5. 


M 


%^ 


IP 


i.i 


80 


ECONOMIC  HlSTOllY. 


and  laslly,  iii  the  year  1TH7  there  was  a  losa  of  twonty-ono 
inillioiis  Iroiii  the  cessation  of  a  tax  wliieh  had  only  been 
imposed  for  a  pei-iod  eiidiii«,'  with  that  year.  'Die  dclieit, 
therefore,  ainouiited  to  one  hundred  and  ninety-eidit  mil- 
lions. U|)  to  (his  time  the  j^overnnu'nt  had  hidpcMJ  itself  by 
all  the  arliliees,  both  bad  and  good,  of  a  credit  strained  to  the 
very  utmost  and  now  utterly  exhausted.  An  inen-ase  of  the 
taxes  was  nt»t  to  lie  thoujilit  of  on  account  of  the  eiioiinoua 
burdens  by  which  the  nation  was  already  cruslird.  Under 
these  circumstances  C.  lonne,  with  jrenial  frivolity,  recurred 
to  the  serious  and  nolde  plans  of  Turj>-ot. 

He  had  hitherto  lived  on  tlic  favor  of  the  jnivilejred 
classes;  he  now  endeavored  by  sacrilicinir  them  to  relieve 
the  ('(mimonwealth.  lie  congralulate(l  the  State  on  having 
within  it  so  many  great  al)uses,  Ity  the  removal  of  which  new 
sources  of  prosperity  might  be  opened. 

The  (»ppnsition  which  'i'urgot  had  met  with  Avas  of  course 
directed  with  redoubled  fury  against  (^iloune.  A  closely 
crowded  throng  of  privileges  rose  tumultuously  against  his 
plans.  The  court  nol)ility,  the  provincial  estates,  <lie  tax- 
collectors,  the  courts  of  law,  tlu'  ]»olice  oHicers,  the  cnuncil- 
lors  of  the  connininr,  and  the  heads  of  the  guilds,  took  up 
the  contest  against  the  will  of  the  king  and  his  ministeis. 
But  the  development  oi'  modern  ideas  had  made  such  progress 
that  the  parties  competed  w'th  one  anotlier  for  the  power  of 
public  opinion.  The  ministry  itsidf  emancipated  the  press 
in  order  to  exi)08e  the  advocates  of  the  old  system  to  the  na- 
tional conteni|it.  The  young  nobles  of  the  court  ami  in  the 
provinces  armed  the  mob  of  Paris  and  the  pi'asauts  of 
Auvergne  against  the  ministers,  and  instigated  tlieuj  to  vio- 
lent excesses.  An  assembly  of  aristocratic  notaliles,  to 
whom  Calonne  submitted  his  schemes  of  refcuMn,  refused 
their  assent.  clainxMl  the  right  of  inspecting  and  sujierin- 
tending  every  department  of  the  pul)lic  service,  and  emled  liy 
declaring  th.it,  as  they  were  nominees  of  the  king  and  not 
representatives  of  the  nation,  tl  ey  were  not  competent  to 
make  new  grants.  Immediately  after  their  dismissal  the 
parliament  of  Paris,  which  next  to  the  ministry  was  the 


CAUSES   CF  THE   FRENCH   ItEVOLVTlON. 


81 


hijrhost  autliority  in  the  State,  broiit^'ht  forward,  as  a  [M)sitivo 
(Itiiiimd,  wliiit  the  notables  had  only  ni'jrativcly  sujrL'tstcd. 
in  a  formal  decree  they  denumded  that  an  Assfnil)ly  of 
lh(5  States-General  should  he  called, —  an  Asscinldv  which 
lh(!  monarchy  had  dis|tensed  with  (or  two  hundred  years. 
The  ministry  at  first  received  this  proposal  with  jxreat  dis- 
favor; liiit  as  the  want  (»f  money  grew  more  and  more  urgent, 
the  alluring  hope  arose  in  their  mimls  of  linding  in  th< 
States-general,  which  was  chiefly  com|iosed  of  Imrghers,  a 
powerful  support  against  the  privileged  classes.  We  shall 
never  understand  (he  extraordinary  success  of  the  (irs(  revo- 
Indonary  movements,  unless  we  hear  in  mind  wha(  a  larirn 
share  in  (he  government,  of  (he  eoun(ry  was  possessed  hy 
(ho  higher  orders  and  (ho  corporadons,  and  how  (hey  now 
mu(ually  sought  each  odier's  (les(ruc(ion. 

Calonne  was  not  long  al)le  to  ni;ikt  head  against  this  noisy 
op|»osition.  The  last  of  the  man.  Idnws  which  caused  his 
fall  was  dealt  ity  the  (pieen,  whom  lie  afterwards  persecuted 
with  inextinguishable  hatred.  His  successor,  Hrienne,  after 
a  violent  contest  with  the  parliaments,  resigned  his  onico 
when  (he  convocation  of  th(^  States-general  had  already  b(M'n 
determined  on,  and  the  national  bankrup(cy  vir(ually  pro- 
claimed, fiouis  had  recourse  (o  Xecker  airaiii,  who  reallv 
relieved  (he  liuancial  cmbarrassnient  for  (he  mom('n(,  and 
recognizing  llie  n(>cesslty  of  a  liberal  policy,  lixed  (Ik*  meeting 
of  (he  Sta(es-t:vneral  lor  (he  :27(h  of  .Vpcil,  17St>.  The  fer- 
men(,  which  owiuu;  to  the  preceding  disputes  bad  lor  (he  first 
(ime  since  the  religious  wars  peiietrateij  (he  mass  of  the  peo- 
jile,  increased  from  hour  to  hour.  Tlie  agitation  was  princi- 
pally cause(l  by  the  question  whether  the  States-general  should 
meet  as  before  in  thret>  sejiarate  chambers,  or  form  a  single 
assembly,  in  which  the  //(■/•.'<  (7(i/ should  have  a  douldt>  iiuiiiIht 
of  votes.  On  this  point  (h(>  hi(her(o  allied  opjiositiou  parties 
differed,  the  nrisfocrats  advocating  the  separation,  the  liiierals 
the  union  of  the  three  estates.  Necker,  with  gr(\it  want  of 
(act,  betrayed  his  own  views  by  assigning  the  double  numlxT 
of  vf>tes  to  the  t'hrx  r/af,  while  lie  induced  the  government  to 
observe  an  obstinate  silence  on  the  main  point  in  (piestion. 

■  ■    f        , 


'..Ml 

m 


-.\m 


hi-'  * 

i  ''I 

,*  4-, 

ft: 


li 


)  .1 


I    ' 


1^' 


»  ■ 


I 


82 


ECONOMIC  nisTouy. 


Tlic  piihlic  (li'liiitos  oil  this  siihjt'ct  were  alt  tlu'  more  violent  in 


hi 


consiMjUt'iK'c  ol  itiiH  roticenee,  iiiul  in  lirelii^iie  it  came  to  an 
open  eivil  war  lictween  the  nol)ility  and  the  liiir;ihers. 

The  nidieal  ek'nientH  in  France  saw  that  tiieir  time  for  ac- 
tion was  eome,  and  the  great  dearnewa  of  provittions  which 
prcvailt'd  durinjj;  the  winter  montlis  placed  a  lar^re  numher  ol' 
d(  spcnitc  men  at  the  disposal  ot  every  cdnspirator.  In  Taris 
tlic  revolutionary  dema^ojiiies  gathered  round  the  agents 
of  the  Duke  of  Orleans,  and  at  the  <'nd  of  April  tried  their 
strength  in  a  sanguinary  street  riot,  which  was  professedly 
directed  against  the  nsuritius  avarice  of  a  rich  nianutaetnrer, 
liut  really  had  no  other  object  than  to  intimidate  the  mod- 
erate party  before  the  impending  elcetinn  of  the  States- 
general.'  In  other  respects  external  ipiict  still  prevailed 
in  the  provinces;  but  the  feverish  agitation  of  men's  minds 
increased  with  every  day,  and  in  this  stati"  of  things  the 
elections  by  almost  universal  sulTrage  began  to  be  hcdd. 
Every  (deetoral  college  was  to  intrust  its  instructions  and 
complaints  to  its  deputies,  a(!eording  to  mediieval  custom. 
In  every  district,  therefore,  a  long  list  of  al)U.ses  was  drawn 
up  an<l  examined  and  Itrought  home  to  the  minds  of  the 
p(M)ple  at  large  by  means  of  discussion.  A  modern  historian 
has  justly  oliserved  that  these  complaints  do  not  leave  a  sin- 
gle particle  of  the  anclen  r^ifhuc  untouched,  that  everything 
was  rejected  by  the  restless  desire  of  innovation,  and  that 
nnfortunatelv  neither  the  possiliility  nor  the  method  of  in- 
troducing reforms  is  anywhere  pointed  out.  Revolution, 
universal  and  radical  revolution,  speaks  in  every  line  of 
these  documents.  There  was  but  one  thought  through  the 
whole  of  France,  that  thenceforward  a  new  era  was  to  com- 
mence for  the  people  and  the  em])ire,  and  that  the  work  be- 
gun must  be  completed  in  spite  of  every  opposition. 

While  the  millions  in  every  part  of  the  country  were  thus 
emancipating  themselves  fnmi  the  bonds  of  traditional  law, 
uncertain  al)out  their  future,  but  firm  in  their  resolution  to 
proceed,  the  government  was  daily  sinking  more  and  more 

'  This  lins  Ijcen  flo.'irly  anil  concisely  sliown  l)y  Croker  in  his  "  Essays  on 
the  Trench  Kevolution,"  p.  00. 


i 


k  ill 


CAUSES  OF  THE  FliESCll  REVOWTIOS. 


83 


into  utter  lu'lplcHsncsH.  it  had  imli'i'il  a  present iiiu'iit  of  tlie 
(lan^er.s  wliicli  would  aeeonipany  the  hreakinjjj  out  ol"  the 
now  cpoeli,  hut  its  destitution  was  so  coniidete  that  it  eajferly 
lonjjcd  for  the  coninieneeineiit  of  thci  crisis.  Money,  one  of 
the  ffreat  factors  <tf  nuit(  rial  power,  was  not  to  he  found  in 
its  colVi'rs,  and  even  the  other,  the  army,  was  already 
alTected  l»y  the  jreneral  process  of  dissolution.  This  is  per- 
liMps  the  most  important  circunislanoe  with  respect  to  the 
sidtsetpient  ccturse  of  the  French  litsvolution,  aiul  its  tlilTerence 
from  all  those  whicli  have  since  taken  place  in  Europe.  The 
reason  is  simple  eiu)Uirh:  the  Frentdi  army  was  in  the  nuiin 
orjiiinized  accordinjf  to  the  sani(!  principles  as  the  other  do- 
parlnjenta  of  tlu>  State,  and  like  them  had  hecn  thoroui^hly 
nnhin're<l  hy  the  contests  hetwcen  tlu;  crown  and  the  feudal 
oi'dei's  lonj^  ix'fore  the  iu'<>akin<i;  out  of  the  Rev(dution.  The 
noliility  alone  were  eliiiihlc!  for  ciimmissions  in  the  army, 
and  thoujrh  sinjile  exceptions  to  this  rule  really  occurred,  yet 
the  monopoly  was  actually  limited  by  a  law  of  ITMl  to  nolde- 
n»en  of  four  descents.  Twenty-seven  regiments  helonged  to 
foreiuu  or  native  grandees,  and  in  tliest'  the  owner  of  eairh 
r(>uiment  appointed  the  colonel  from  a  list  drawn  up  hy  the 
minister  at  war,  and  tlu^  colonel  appointed  the  otln'r  oillcers. 
The  influence  of  the  king's  government,  thercfori',  in  the 
sideetion  of  ollicers,  was  limited  to  tin;  composition  of  the 
list  of  camlidates  for  the  single  olVuje  of  colonel.  In  the  other 
divisions  of  the  army,  indeed,  the  highest  rank  was  in  the  gift 
of  the  king  alone,  hut  of  the  other  commissions  only  one  half 
weie  hi'stowed  hy  the  king  and  the  other  half  hy  the  colonid. 
The  otlicer  moreover  received  his  commission,  after  giving 
proofs  of  his  fitness,  on  payment  of  a  sum  of  money;  it  was  a 
j)urchase  for  life,  as  in  the  case  of  th(>  courts  of  law  it  was  a 
jturehase  of  an  hereditary  right.  The  duty  of  unconditional 
obedience  was  not  indeed  al)rogated  l)y  this  system,  but  it 
was  inevitable,  especially  under  a  weak  government,  that  the 
corps  of  oiricers  should  feed  itself,  what  it  really  was,  a  part 
of  that  great  aristocracy  which  .shared  with  the  king  the 
ruling  power  of  France  in  every  dcj»artment  of  public  life. 
The  contest  between  this  nobility  and  the  ministry,  by  which 


hi  /i 

m 

Bit-    'I'T 
BK.    i' 


V  'I'll 


'I 


'.(^ 


-ii 


^>y 


<^. 


IMAGE  EVALUATION 
TEST  TARGET  (MT-3) 


% 


A 


^/ 


<$> 


^ 


&?• 


:/ 


5^  ^^  ^^. 


1.0 


I.I 


1.25 


'"  IIIM  |||I|M 
^-  IM  '2I 


IIM 

HO 


12.0 


III™ 

U    III  1.6 


^- 


.^ 


V} 


<9 


^ 


/^ 


c-j 


^^-y- 


^el 


/. 


y 


y^ 


Photographic 

Sciences 
Corporation 


23  WEST  MAIN  STREET 

WEBSTER,  NY.  14580 

(716)  872-4503 


a^^ 


^ 


S^.- 


CA 


:\ 


\ 


6^ 


84 


ECONOMIC  HISTORY. 


\m 


the  last  years  of  the  ancien  rSgime  were  filled,  must,  there- 
fore, have  had  a  deep  effect  upon  the  army.  It  frequently 
occurred  that  the  officers,  like  the  judges,  with  their  colonels 
at  their  head,  refused  obedience.  And  as  in  the  rural  dis- 
tricts the  opposition  of  the  aristocracy  was  followed  by  ex- 
citement among  the  peasants,  and  the  opposition  of  the 
towns  by  excitement  among  the  artisans,  so  in  the  case  of 
the  army  the  popular  movement  found  its  way  into  the  minds 
of  the  soldiers,  and  operated  side  by  side  with  the  class  re- 
sistance of  the  officers.  The  common  soldiers  had  felt  the 
oppression  of  the  ancien  regime  perhaps  more  deeply  than  the 
peasants  themselves,  for  they  were  starving  on  a  pay  of  ten 
sous,  while  countless  sums  were  employed  in  rich  endow- 
ments for  1,171  generals.  They  suffered  all  the  insolence 
of  the  nobility  towards  the  canaille,  embittered  by  the  weight 
of  a  severe  and  often  brutal  discipline,  and,  like  their  fellow- 
citizens,  they  looked  forward  to  the  meeting  of  the  States- 
general  as  the  signal  of  liberation  from  intolerable  slavery. 
The  number  of  regiments  on  which  the  government  could 
reckon  was  extremely  small.  The  bands  of  discipline  were 
loosened  iu  every  rank;  the  officers  invoighed  against  the 
despotism  of  the  ministers,  and  the  soldiers  promised  one 
another  to  do  nothing  against  the  people. 

The  ancient  polity,  therefore,  was  destroyed  by  its  own 
internal  discord  and  dii>-  olution  before  a  single  revolutionary 
word  had  been  uttered.  The  government  Avas  destitute  of  money 
and  troops  to  defend  its  position,  and  the  feudal  seigniors, 
though  they  had  important  individual  rights,  had  no  general 
organization  which  could  enable  them  to  replace  the  govern- 
ment. As  soon  as  public  opinion,  which,  guided  by  radical 
theories,  emphatically  rejected  both  the  government  and  the 
aristocracy,  obtained  an  organ  of  power  in  the  States-general 
it  only  needed  to  declare  its  will,  nay,  only  to  give  expres- 
sion to  the  facts  before  them,  and  the  old  system  hopelessly 
collapsed  in  its  own  rottenness.  What  was  to  follow  no  man 
at  that  time  was  able  to  foresee.  As  most  men  were  ex- 
tremely ill-informed  respecting  the  condition  of  the  country, 
they  indulged  in  hopes  which  were  all  the  more  ardent  in 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


85 


proportion  as  they  wore  undefined.  But  there  were  many 
who  knew  the  poverty  and  brutality  of  the  masses,  the  bitter 
hatred  between  rich  and  poor,  and  the  selfish  immorality  of 
the  upper  classes,  and  looked,  some  with  ambitionij  pleas- 
ure, others  with  patriotic  anxiety  towards  a  stormy  future. 


A' 
1* 


t<  h  m 


86 


ECONOMIC  HISTORY. 


ill 

If 
II 

m 

'  Ji  ii 


IV. 


THE  EDICTS  OP  STEIN  AND  HARDENBERG. 

THE  EMANCIPATING  EDICT  OF  STEIN. 

Fkom  Seeley's  Life  and  Times  of  Stein.i  Vol.  I.  pp.  287-297. 

1807. 
T  CALL  by  this  name  the  great  edict  which  was  signed  on 
-^  the  9th  of  October,  that  is,  only  five  days  after  Stein  had 
received  his  powers,  not  solely  because  it  contains  the  provi- 
sion that  from  a  certain  date  there  shall  be  only  free  persons 
in  the  States  of  the  King  of  Prussia.  It  is  indeed  to  be  re- 
marked that  the  principal  authors  of  the  measure  are  so 
intoxicated  with  the  pride  of  being  the  bestowers  of  freedom 
upon  bondsmen  that  they  forget  to  remark  how  much  more 
and  how  many  other  emancipations  they  accomplished  by 
the  same  act.  Stein's  own  account  of  the  edict  of  October 
runs  as  follows :  — 

"The  measures  adopted  to  reach  the  above-mentioned  general 
object  were :  — 

"  (1)  Abolition  of  personal  serfdom  in  the  Prussian  Monarchy  : 
by  an  Edict  of  October,  1807,  it  was  decreed  tliat  from  October 
8tli,  1809  (sic;  it  should  be  1810),  i)er.s()nal  serfdom  with  its  con- 
sequences, especially  the  very  oi)ijressive  obligation  of  menial  ser- 
vice, should  be  abolished;  but  the  obligations  of  the  peasant,  as 
far  as  they  flowed  from  his  possession  of  property,  remained  unal- 
tered. It  was  reserved  for  the  Chancellor  Hardenberg's  love  of 
innovation  (on  the  advice  of  a  H.  Scharrenweber,  a  dreamer  who 
(lied  in  a  madhouse  at  Eberbacli  in  1820)  to  transform  in  1811  the 
relations  of  the  landlord  to  the  peasant  class,  and  its  inner  family 
relations  in  a  manner  pernicious  to  it;   in  this  I  had  no  share. 

"  (2)  The  transformation  of  the  peasants  on  the  Domain  in  East 
and  West  Prussia  into  free  proprietors." 


University  Press,  Cambridge,  Eng.,  1870. 


EDICTS  OF  STEIN  AND  HARDENDERG. 


87 


Here  not  a  word  is  said  of  any  changes  made  by  the  Edict 
of  October  except  those  which  affected  the  peasant.  It  is 
the  same  aspect  of  the  edict  which  interests  Schtin.  This 
edict,  he  says,  "has  made  the  figure  of  the  king  stand 
higlier,  since  he  is  henceforth  no  longer  a  king  of  slaves,  but 
of  free  men. "     And  again :  — 

"Tims  came  into  existence  the  law  of  Oct.  9th,  1807,  that 
Habeas  Cori)us  Act  of  our  State.  The  idea  of  freedom  had  begun 
to  live.  With  ninety-nine  hundredths  of  the  people  it  made  a 
deep  and  elevating  imi)ression;  the  few  friends  of  slavery  intrigued 
and  nnirmured  no  doubt  a  good  deal,  so  that,  according  to  Rliedi- 
ger's  story,  a  prejudiced  man  said  at  the  Herlin  Casino  after  read- 
ing the  law,  'Rather  three  battles  of  Aucrstiidt  than  such  a  law!  ' 
But  the  king  stood  firm,  and  God  maintained  the  right." 


In  stating  pretty  strongly  his  claims  to  be  considered  the 
real  author  of  the  law,  Schon  uses  language  which  shows  that 
he  is  thinking  almost  exclusively  of  this  part  of  it.  "All 
else  that  I  did  in  life, "  he  says,  "  was  as  nothing  compared 
to  calling  into  life  the  idea  of  freedom."  Only  from  one 
casual  expression  do  we  learn  that  he  even  knew  that  the 
measure  had  another  side,  where  he  says,  "  I  represented  that 
hereditary  serfdom,  that  scourge  of  our  country,  must  be 
brought  to  an  end,  and  that  a  proclamation  of  free  trade  in 
landed  property  would  bo  sufficient  to  promote  material 
interests." 

Here  we  are  suddenly  introduced  to  something  quite  now, 
and  very  different  from  the  abolition  of  serfdom,  namely, 
free  trade  in  landed  property. 

Up  to  a  certain  point  it  is  true  that  these  two  things  coin- 
cide. One  part  of  the  burden  of  serfdom  lay  in  the  incapac- 
ity of  the  serf  to  alienate  his  land,  bi.c  this  is  a  small  matter. 
The  proclamation  of  free  trade  in  land  affected  all  classes  of 
society  at  once,  and  the  upper  and  middle  classes  much  more 
than  the  peasantry.  When,  therefore,  we  observe  that  the 
edict  of  the  9th  of  October,  at  the  same  time  that  it  abolished 
personal  serfdom,  removed  all  the  principal  restrictions  that 
interfered  with  traffic  in  land,  we  see  that  it  is  in  fact  not  a 


I*"  H 


'f  M 


r   i?i 


f 


88 


ECONOMIC  HISTORY. 


single  law,  but  two  laws  in  one,  and  two  laws  of  such  mag- 
nitude that  each  by  itself  might  bo  considered  equivalent  to 
a  social  revolution. 

But  when  we  look  closer  still  we  discover  that  the  edict 
goes  even  furthei-,  and  should  be  rather  described  as  three- 
fold than  as  twofold.  Englishmen  are  only  too  familiar  with 
the  notion  of  a  depressed  class  of  agricultural  laborers;  but 
such  depression  may  be  of  two  kinds,  and  may  spring  from 
two  very  different  causes.  We  are  not  to  suppose  that  the 
peasantry  of  Prussia  were  in  a  condition  resembling  that  of 
our  own  laborers  any  further  than  as  it  was  bad.  The  evils 
afllicting  the  Prussian  peasantry  were  those  arising  out  of 
itaiUH  ;  those  which  alTlict  English  laborers  arise  mainly  out 
of  contract.  The  English  laborer  is  nominally  free  and  at 
liberty  .o  carry  i:l3  industry  to  the  best  market;  he  is  re- 
duced to  real  dependence  by  his  inability  to  make  a  favorable 
bargain  for  himself.  The  Prussian  peasant  was  nominally 
a  serf,  but  in  reality  some  very  important  rights  were  se- 
cured to  him.  We  arc  not  to  suppose,  for  instance,  that  cruel 
punishments  were  allowed,  or  that  he  was  subject  to  the  ca- 
price of  the  landlord.  He  was  far  more  of  a  proprietor  than 
the  English  laborer,  for,  though  on  a  degrading  tenure,  he 
did  for  practical  purposes  own  land.  Nor  were  his  interests 
neglected  as  those  of  a  freeman,  who  is  supposed  able  to  take 
care  of  himself,  may  be  neglected.  Not  only  was  he  a  mem- 
ber of  an  ancient  and  organized  village  community,  but  the 
Government  also  took,  and  was  obliged  to  take,  the  greatest 
possible  interest  in  his  class ;  for  these  serfs  were  neither 
more  nor  less  than  the  Prussian  army. 

Now  it  might  very  plausibly  be  maintained  that  the  pro- 
clamation of  free  trade  in  land  would  not  create  a  happy 
peasant  class,  but  would  simply  substitute  for  a  jjcasantry 
laboring  under  certain  evils  that  class  of  famished  drudges 
whom  we  know  in  England,  and  who  if  they  cannot  be  called 
serfs  can  still  less  be  called  peasants,  for  a  peasant  properly 
so  called  must  have  a  personal  interest  in  the  land.  Hence 
the  conservative  opponents  of  Stein,  such  as  Marwitz,  actually 
declare  that  there  existed  no  slavery  or  serfdom  in  the  land 


II 


I 


EDICTS  OF  STEIN  AND  HARDEN  BERG. 


89 


when  ho  professed  to  abolish  it,  but  "that  it  thou  for  the 
first  tiuio  began  to  appear,  namely,  the  serfdom  of  the  small 
holder  towards  the  creditor,  of  the  poor  and  sick  towards  the 
police  and  the  work-houses;"  and  again,  "that  with  the  pro- 
clamation of  free  trade  disappeared  the  previous  security  of 
the  peasantry  in  their  holdings.  Every  rich  landowner  could 
now  buy  thorn  out  and  send  them  off;  fortunately,  scarcely 
anybody  was  rich  any  longer ! " 

These  were  the  criticisms  of  the  conservative  party,  which 
might  have  been  very  truly  applicable  to  a  simple  measure 
of  free  trade  in  land.  But  the  edict  of  October  had  in  fact 
taken  account  of  the  danger,  and  contained  an  express  pro- 
vision to  meet  it.  Hence,  as  I  have  said,  it  was  actually  a 
threefold  enactment,  for  not  only  did  it  first  abolish  serfdom, 
and  secondly,  establish  free  trade  in  land,  but,  thirdly,  it 
endeavored  to  guard  the  peasantry  against  the  danger,  which 
in  so  many  countries  has  proved  serious,  of  being  gradually 
driven  out  or  turned  from  proprietors  into  wage-receivers  by 
the  effects  of  the  unequal  competition  to  which  they  are 
exposed. 

At  the  same  time  that  we  carefully  distinguish  these 
different  enactments  all  included  in  one  legislative  edict, 
let  us  1)0  as  careful  to  remark  what  was  not  included  in  it. 
Englishmen  arc  apt  to  attribute  to  the  legislation  of  Stein  all 
the  innovations  introduced  in  this  period.  In  particular  it 
has  been  supposed  that  he  created  the  j)easant-proprietorship 
of  modern  Prussia.  But  this  he  did  not  do,  except,  as  he 
says  in  the  passage  quoted  above,  on  the  Domain  Lands  of 
West  and  East  Prussia.  Proprietors  in  a  certain  sense  the 
peasantry  were  l)efore  this  edict,  that  is,  they  cultivated 
land  for  themselves,  and  with  a  considerable  sense  of  secur- 
ity ;  proprietors  in  the  full  sense  they  were  not,  because  they 
hold  of  a  landlord  to  whom  they  owed  various  dues  and 
services.  Now  Stein's  edict  altered  the  nature  of  these  ser- 
vices, and  abolished  the  most  oppressive;  but  it  did  not 
destroy  the  rights  of  the  landlord  or  leave  the  peasant  sole 
master  of  the  land  he  cultivated.  It  was  reserved  for 
Hardenberg  to  do  this  by  an  edict  issued  on  Sept.  14,  1811, 


m 


m 


'm 


hit 
IP  I 

m 


I"  i 


mi 


f 


!  ' 


[h    I 


90 


ECONOMIC  IIISrORY. 


Ml  . 


und  it  should  bo  noticed  that  Stein  expressly  declines  to  ac- 
cept any  rcsixinsibility  for  this  innovation.  Again,  it  is  not 
to  bo  supposed  that  the  provision  just  mentioned,  by  which 
Stein  tried  to  jtrcv-ent  the  altsorption  of  the  small  holdings  by 
Ihe  great  proprietors,  has  actually  proved  the  menns  of  pre- 
serving the  peasant  class  in  Prussia;  for  all  this  passed  away 
with  the  legislation  of  IJardenbcrg,  and  it  has  been  by  its 
own  vitality,  and  not  by  State  interference,  that  jteasant- 
proprietorship  has  maintained  itself. 

Further,  it  is  to  be  remarked  that  Htein  is  (]uitc  accurate 
when  he  describes  his  Land  Reform  as  not  consisting  solely 
in  the  edict  of  October,  but  as  incliuling  also  another  quite 
distinct  act  of  legislation,  which  applied  only  to  the  i)rov- 
inces  of  East  and  West  Prussia.  This  act  belongs  to  July, 
1808,  and  is  confined  not  simply  to  the  peasants  of  those  two 
provinces,  but  to  a  particular  chiss  of  peasants,  namely, 
those  sometimes  called  ivwiediatc  peasants,  or  in  other  words 
those  who,  living  on  the  Royal  Domains,  had  no  other  land- 
lord but  the  king.  It  is  evident  that  the  (lovcrnment  could 
deal  with  these  more  easily  than  with  those  peasants  whose 
condition  it  could  not  improve  without  meddling  wilh  the 
rights  of  another  class.  The  extreme  distress  in  which 
these  two  provinces  lay,  and  which  the  Government  was  in 
no  condition  to  relieve  directly,  was  the  justification  for 
granting  privileges  to  these  particular  immediate  ])easant8, 
which  for  the  moment  were  not  extended  to  tliv^oC  of  the 
other  provinces. 

Such  then,  defined  in  general  terms,  was  the  extent  of 
this  reform.  It  needs,  however,  a  much  closer  descrii)tion. 
In  the  first  place  the  reader  must  guard  against  a  misappre- 
hension of  the  phrase  "free  trade  in  land"  into  which  he  is 
likely  to  be  led  by  his  English  experience.  Free  trade  in 
land  is  also  a  cry  of  our  own  reformers ;  but  we  must  beware 
of  sujiposing  that  what  they  call  for  is  the  same  thing  that 
was  granted  in  Prussia  by  Stein's  edict.  The  complaint  in 
England  is  that  a  niunl)er  of  practical  obstructions  prevent 
land  from  being  the  object  of  such  free  purchase  and  sale  as 
other  commodities.     Much  of  the  land  of  the  country,  it  is 


)■'         ! 


EDICTS  OF  STEIN  AND  JIARDENDERG. 


91 


I 


^ 


said,  is  in  the  hands  of  persons  who  in  family  settlements 
have  given  up  the  right  to  alienate  it;  the  system  tinder 
which  landed  property  is  conveyed  is  so  cumbrous  and  ex- 
pensive as  to  deter  people  from  transactions  of  the  kind; 
and  lastly  by  recognizing  the  principle  of  primogeniture  with 
respect  to  land  and  not  with  respect  to  i)ersoual  proi)erty  in 
cases  of  intestacy,  the  law  itself  countenances  the  notion  that 
landed  property  staiuls  in  a  class  l)y  itself,  and  is  not  to  be 
di'alt  with  or  transferred  as  if  it  were  purely  a  commodity. 
Xow  it  is  an  instance  of  the  confusing  and  misleading  in- 
accuracy of  our  party  cries,  when  the  removal  of  these 
restrictions  is  called  free  trade  in  land.  Free  trade  in  other 
cases  means  the  removal  of  restrictions  imposed  by  the  law 
or  l)y  the  government;  but  these  restrictions  arc  of  (piitc  an- 
other kind.  Only  the  last  mentioned  is  the  work  of  the  law, 
and  it  cannot  in  any  ])roper  sense  be  called  a  restriction,  for 
the  only  way  in  which  it  operates  rostrictingly  is  by  lending 
the  moral  influence  of  the  law  to  the  sujjport  of  a  restrictive 
system.  The  curnl)rousnes8  of  our  conveyancing  is  merely 
the  result  of  the  gradual  way  in  which  our  land  system  has 
been  formed,  and  as  to  the  system  of  settlements,  so  far 
from  being  a  restriction  of  freedom,  it  is  the  direct  result  of 
freedom  of  contract, —  so  much  so  that  the  reformers  them- 
selves demand  an  interference  of  the  law  to  prevent  it;  in 
other  words,  wish  to  promote  what  they  call  free  trade  by  a 
new  legal  prohibition. 

Now  when  Stein  is  said  to  have  established  free  trade  in 
land  the  expression  is  to  be  understood  literally.  The  hin- 
drances to  the  sale  and  purchase  of  land  which  ho  removed 
were  not  accidental  pr  ictical  obstacles,  but  formal  legal  pro- 
hibitions. In  the  old  law  of  Prussia  and  in  the  Code  of 
Frederick  or  Allgemeines  Landrecht,  which  came  into  force 
in  1704,  it  is  laid  down  that  nol)le  estates  (adelige  Giitcr) 
can  only  be  held  by  nobles,  and  that  persons  of  civic  origin 
(biirgerlicher  Herkunft)  can  only  acquire  them  by  express 
permission  of  the  sovereign.  In  the  same  way  peasant-land 
could,  as  a  rule,  only  be  held  by  peasants,  and  land  belong- 
ing to  towns  only  by  citizens.     We  are  familiar  with  the 


■'  !;fa 


It' 


ll 


;  ^n 


II 

i 


li: ) 


m 


;r.  ■ 


' 


f 


i  ' 


ii  I  ' 

it  I'll 


92 


E  CONOMIC  HIS  TOR  Y. 


idea  of  casto  ns  applied  to  hiimau  beiii^s,  that  is,  of  an  nnal- 
tei'ttble  Htatm  staiuped  upon  a  luau  from  his  l)irth;  in  Prussia 
it  luiiy  lie  siiid  tliat  casto  extended  aetually  to  the  land,  so 
that  every  rood  of  soil  in  the  country  was  of  a  delinile  and 
unalteral)le  rank,  and,  liowevcr  it  nii^ht  change  its  owners, 
always  remained  either  noble  or  citizen  or  j)easant  land. 
Now  the  llrst  innovation  contained  in  Stein's  edict  consisted 
in  (Miicellinu;  in  the  fewest  and  simplest  words  all  the  regu- 
lations which  established  caste  in  land. 

When  the  edict  is  examined  more  closely  it  will  l)e  seen 
to  be  much  more  comprehensive  even  than  it  was  repri'sented 
above  when  1  pointed  out  how  much  more  comi)rehensive  it 
was  than  was  commonly  snj)i)osed,  or  than  Steiii  himself 
descril)ed  it.  For  at  the  same  time  that  it  abolishes  caste 
in  land  it  accomplishes  another  act  of  emancipation,  which 
is  in  no  way  exi»re8sed  in  the  phrase  free  trade  in  land ;  it 
removes  another  quite  distinct  set  of  restrictions  and  abol- 
ishes caste  in  persons.  The  Code  of  Frederick  i»rohibited 
the  nobleman  from  engaging  in  any  occupation  properly 
belonging  to  the  citizen,  and  only  allowed  under  certain 
conditions  the  citizen  to  pass  into  the  class  of  ])casants  or 
the  peasant  into  the  class  of  citizens.  The  Nobles,  the  Citi- 
zens, the  Peasants;  these  were  the  three  castes  into  which 
the  Prussian  population  outside  the  professions  was  divided; 
into  one  or  other  of  them  each  ])erson  was  born,  and  in  the 
same,  as  a  rule,  he  died.  To  each  caste  was  assigned  its 
special  pursuit.  The  Noble  cultivated  his  estate  and  exer- 
cised jurisdiction  over  the  peasantry  who  held  under  him, 
though  he  could  not  himself  hold  or  cultivate  peasant-land; 
he  also  served  the  king  in  civil  or  military  oflice.  The 
Peasant  cultivated  his  plot  of  ground  rendering  fixed  services 
to  the  lord  and  subject  to  his  jui-isdiction,  and  belonged  at 
the  same  time  to  the  rank  and  file  of  the  army.  Between 
them  stood  the  Citizen,  holding  a  monopoly  of  trades  and 
industries  which  by  law  were  confined,  with  few  exceptions, 
to  the  towns.  It  is  remarkable  that  the  military  profession 
was,  for  the  most  part,  closed  to  him.  This  must  be  borne 
in  mind  when  we  compare  the  Seven  Years'  War  with  the 


fr  . 


\  I- 


EDICTS  OF  STEIN  AND  HARDENDEHG. 


93 


War  of  Libiiratlon.  Wo  have  read  of  the  fearful  consuinp- 
tiou  of  nu'ii  caused  by  the  Seven  Years'  War,  and  of  the 
desperate  shifts  of  Frederick  to  procure  recruits;  hut  we 
nuist  understautl  that  no  levee  en  mitane  took  phice  tiicn,  and 
tliat  tlie  citizen  eh)ss  had  scarcely  any  share  in  what  was 
•joinir  forward.  This  is  the  more  to  he  noted  because  the 
connection  between  the  citizen  class  and  the  learucd  (dans 
was  ch)S('r  than  in  other  countries.  TIk;  learniuir,  litera- 
ture, anil  philosojihy,  which  lloui-ished  so  riMuarkalily  in  that 
aiic  took  the  tone  of  the  middle  class,  and  a  curious  result 
followed.  In  the  most  military  of  all  modern  States,  litera- 
ture, because  it  apranu:  from  a  class  which  enjoyed  an  ex- 
emption from  military  service,  and  as  a  conseipience,  the 
tone  of  public  feelini^  which  is  d(!termined  l)y  literature, 
was  in  an  especial  deirree  wanting  in  the  military  spirit,— 
Scharnhorst  describes  the  army  as  being  generally  hated 
and  despised,  and  Kant  speaks  with  contempt  of  a  man  of 
cducatiim  who  had  embraced  a  military  life,  —  and  this  fact 
goes  some  way  to  ex])lain  that  phenomenon  of  a  military 
State  lighting  exceptionally  ill  which  we  have  so  long  luid 
before  us. 

This  state  of  society  is  very  foreign  to  our  ideas,  and  may 
perhaps,  because  we  have  no  exjierience  of  it,  fascinate  some 
imaginations.  No  laisxez  /aire  here;  every  man's  place  is 
assigned  to  him  from  his  birth;  his  occupations  are  pre- 
scribed, and  a  great  taskmaster  or  earthly  Providence  stands 
at  the  head  of  the  whole  society,  which  may  be  called  army 
or  nation  at  jdeasure,  since  even  the  unmilitary  citizens  were 
regardeil  l)y  the  State  i)rincipally  as  a  sort  of  commissariat 
department.  And  for  the  immediate  purjjose  of  Frederick 
William  I.  and  Frederick  the  Great  the  system  was  well 
adapted,  for  that  purpose  was  simply  military.  A  place  for 
every  man,  and  every  man  in  his  ])lace;  the  "j)roduetivc 
forces  of  the  country  perfectly  inventoried  and  a  debtoi-  and 
creditor  account  of  its  resources  kept;"^  by  such  a  system 
the  rulers  could  wield  the  whole  force  of  the  country  most 
easily  and  certainly.     Nevertheless,  the  destruction  of  this 

>  Morier. 


[ 
I 

v\ 


<s<| 


!   W, 


iU' 


I  -'sa 


m 


04 


ECONOMIC  ins  TOR  Y. 


wliole  syatcm  by  a  stroke  of  Stein's  pen  was  now  regfirtled  as 
the  greatest  ol'  reforms  and  the  comnieneenient  of  the  resto- 
ration of  I'russia.  For  it  will  be  evident  that  the  Bame  sys- 
tem whieli  coneentrated  so  powerfully  and  measured  so  e.\- 
uetly  the  forces  of  the  country  at  the  same  time  entirely 
preventi;d  them  from  growiuff,  not  to  mention  the  intellect- 
ual stagnation,  outside  the  university  world,  which  was  pro- 
duced by  such  rigid  uniformity  of  life.  A  country  in  which 
no  man  can  follow  his  natural  lient,  take  to  agriculture  if  he 
does  not  like  trade,  or  to  trade  if  lu;  does  not  succeed  in  agri- 
culture, is  evidently  not  an  industrial  country.  Its  material 
resources  under  such  a  system  will  remain  undeveloped,  and 
if  it  be  a  poor  country,  as  Prussia  was,  the  system  will  actu- 
ally in  the  end  defeat  its  own  object,  for  such  a  country  from 
mei'e  j)overty  will  be  weak  in  war. 

As  the  first  section  of  the  edict  abolished  what  1  have 
called  "caste  in  land,"  so  the  second,  consisting  of  aljout 
three  lines,  abolished  caste  in  persons.  And  here  it  may 
perhaps  be  observed  that  I  omitted  above  one  principal  cir- 
cumstance which  made  such  sweeping  changes  so  easy  to 
Stein.  Uefore  the  Peace  of  Tilsit  it  would  have  been  scarcely 
possil)le  to  carry  out  such  reforms,  however  nnich  the  rulers 
might  have  been  convinced  of  their  necessity.  Frederick 
had  shrunk  from  the  emancipation  of  the  serfs  because  ho 
felt  that  it  would  introduce  disorder  into  his  army,  and  for 
the  same  reason  these  reforms  also  would  have  been  scarcely 
])raetieal»le  so  long  as  the  army  existed.  The  di-sastei-s 
brought  v,'ith  them  the  compensation  that  they  destroyed  for 
a  moment  this  incubus.  The  necessity  of  maintaining  a 
great  position  in  Europe,  the  necessity  even  of  defending  the 
country,  ceased  when  the  country  actually  fell  into  French 
occu|)ation;  and  thus,  as  we  may  say,  the  building  being  down 
it  was  i'or  the  first  time  possible  to  mend  a  defect  in  the 
foundati(jns. 

Tlu>sc  reforms,  favored  as  they  were  by  circumstances  and 
requiring  but  few  lines  in  the  edict,  were  yet  much  more 
fundamental  and  pregnant  with  consequences  than  any  such 
practical  reforms  as  may  be  called  for  in  England  to  make 


Hi 


EDICTS  OF  STEIN  AND  IlAHDEXIiERG. 


96 


the  |)iir('li!isi'  of  land  more  easy.  Tlioy  were  a  sort  of  Ma^'iia 
Cliarta  to  the  Prussians,  and  Schon  mijjrlit  well  liavi;  applied 
to  thcni  the  enthusiastic  expressions  which  he  keeps  for  thi; 
sections  which  emancipated  the  serf.  In  v.  Ronne's  stand- 
ard text-hook  of  Prussian  Constitutional  Law  1  (ind  in  thv 
I'liaptfT  on  Itijiihts,  under  the  Hist  lille,  Preedom  or  Si'curity 
of  th(^  Peison,  that  tliis  freedom  is  composed  of  three  rights: 
(1)  the  riuht  of  movement  and  free  choice  of  ahodc  (Preizii- 
i^ij^keit);  (2)  the  rij^ht  of  eniii;ration  (Answanderunirsreclit) ; 
('■])  the  rii//if  of  i'luK'xuiij  <i  eii//ini/  ar  Iruih;  (Preie  Wahl  von 
15eruf  und  (Jewerbe) ;  and  this  tiiird  right,  we  are  infcjrnied, 
was  ji'iven  to  the;  Prussians  by  the  edict  of  October,  1807. 
The  same  is  said  of  the  lirst  of  the  rinhts  which  go  to  make 
up  the  second  tith;;  nanudy,  free  right  to  the  ac4ui;<ition 
and  possession  of  pi'opcty  (Prcies  Recht  zum  Erwerl)e  und 
Uesitze  des  Kiglienthums). 

I  proceed  to  give  the  text  of  this  edict,  the  vast  impor- 
tance of  which  will  liave  l)y  this  time  i)ecome  clear.  Tho 
less  ir-;  rtant  sections  are  pi-inted  in  a  smaller  type,  and  of 
§§    III,    and   v.,    as   ])urely   technical,    only  the   heading  is 


Edict  concern'ni'j  the  facU'ttattoii  of  posses fiio7i  and  the  free  use  of 
hmdrd  projxrfij,  as  irell  as  tlie personal  relations  of  the  inhabi- 
tants of  the  count nj. 

AVk,  Frederick  Williiiin,  hy  the  grace  of  (lOil  Kinp;  of  Prussia,  &c.,  &c., 
JIakc  known  lu'irhv  ami  j;ive  to  uiulerstand.  Since  tiie  iH'jiinniiif;  of  the 
peace  We  liave  been  liefore  all  things  occupied  with  tho  care  for  the  de- 
pressed condition  of  Our  faithful  suhjects,  and  the  sjieodiest  restoration 
and  "greatest  ini|irovement  of  it.  We  have  herein  considertd  that  in  the 
universal  need  it  ])asses  tiie  means  at  Our  command  to  furnish  hel[)  to  each 
indiviihial,  an<l  yet  We  could  not  attain  the  oliject ;  and  it  accords  e(|ually 
with  the  inii)erative  demands  of  justii'c  and  with  tlie  principles  of  a  proper 
national  economy,  to  remove  all  the  hindrances  which  hitherto  prevented 
the  individual  from  iittainin'^  the  ])rosperity  which,  according  to  tlu! 
measure  of  his  powers,  he  was  capable  of  reachin;^ ;  further,  \\'e  have 
considered  that  the  existing  restrictions,  partly  on  the  possession  and  en- 
joyment of  landed  property,  partly  on  the  personal  condition  of  tlie  agri- 
cultural laborer,  specially  tliwart  Our  benevolent  purpose?  and  disable  a 
great  force  which  might  be  applied  to  the  restoration  of  cultivation,  the 


11 


i 

.'!i 

p. 

it 


iiil 


If;'' 


96 


ECONOMIC  HISTORY. 


f 


former  by  their  prejudicial  influence  on  the  value  of  landed  property  and 
the  credit  of  the  proprietor,  the  latter  by  diminishing  the  value  of  labor. 
\\c  j)urpo8e,  therefore,  to  reduce  both  within  the  limits  required  by  the 
common  well-being,  and  accordingly  ordain  as  follows :  — 

§  I.     Freedom  of  Exchange  in  Land. 

Every  inhabitant  of  our  States  is  competent,  without  any  limita- 
tion on  the  part  of  the  State,  to  possess  either  as  property  or  pledge 
landed  estates  of  every  kind :  the  nobleman  therefore  to  possess  not 
only  noble  but  also  non-noble,  citizen,  and  peasant  lands  of  every 
kind,  and  tlie  citizen  and  peasant  to  possess  not  only  citizen,  peas- 
ant, and  other  non-noble,  but  also  noble,  pieces  of  land,  without 
either  the  one  or  the  otlier  needing  any  special  permission  for  any 
acquisition  of  land  whatever,  although,  henceforward  as  before, 
each  change  of  possession  must  be  announced  to  the  authorities. 

§  II.     Free  Choice  of  Occupation. 

Every  noble  is  henceforth  permitted  without  any  derogation  from 
his  position,  to  exercise  citizen  occupations;  and  every  citizen  or 
peasant  is  allowed  to  pass  from  the  peasant  into  the  citizen  class, 
or  from  the  citizen  into  the  peasant  class. 

§  III.  How  far  a  legal  right  of  Pi-e-emption  and  a  First  Claim  still 
exist. 

§   IV.     Division  of  Lands. 

Owners  of  Estates  and  Lands  of  all  kinds,  in  themselves  alienable  either 
in  Town  or  Country,  are  allowed,  after  due  notice  given  to  the  provincial 
authority,  with  reservation  of  the  rights  of  Direct  Creditors  and  of  those 
who  have  the  right  of  pre-emption  (§  IIL),  to  separate  the  principal  estate 
and  its  parts,  and  in  general  to  alienate  piecemeal.  In  the  same  w.ay  Co- 
proprietors  may  divide  among  them  property  owned  in  common. 

§  V.     Granting  of  Estates  under  Leases  for  a  Long  Term 

§  VI.     Extinction  and  Consolidation  of  Peasant  Holdings. 

When  a  landed  proprietor  believes  himself  unable  to  restore  or 
keep  up  the  several  peasant  holdings  existing  on  an  estate  which 
are  not  held  by  a  hereditary  tenure,  whether  of  a  long  lease  or  of 
copyhold,  he  is  required  to  give  information  to  the  government  of 
the  province,  with  the  sanction  of  which  the  consolidation,  either 
of  several  holdings  into  a  single  peasant  estate,  or  with  demesne 
land,  may  be  allowed  as  soon  as  hereditary  serfdom  shall  have 
ceased  to  exist  on  the  estate.  Tlie  provincial  Authorities  will  be 
provided  with  a  special  instruction  to  meet  these  cases. 

§  VII.  If,  on  the  other  hand,  the  peasant  tenures  are  hered- 
itary, whether  of  long  lease  or  of  copyhold,  the  consolidation  or 


1 1') 


EDICTS  OF  STEIN  AND  HARDENBERG. 


97 


other  alteration  of  the  condition  of  the  lands  in  question,  is  not 
admissible  until  the  right  of  the  actual  possessor  is  extinguished, 
whether  by  the  purchase  of  it  by  the  lord  or  in  some  other  legal 
way.     In  this  case  the  regulations  of  §  VI.  also  apply. 

§  VIII.  Indebtedness  of  Feudal  and  Entailed  Estates  in  consequence 
of  the  Ravages  of  War. 

Every  possessor  of  feudal  or  entailed  property  is  empowered  to  raise  the 
suras  required  to  replace  the  losses  caused  by  war,  by  mortgaging  the  sub- 
stance of  the  Estates  themselves,  as  well  as  the  revenues  of,  them,  provided 
the  application  of  the  money'is  attested  by  the  Administrator  (Landrath) 
of  the  Circle  or  the  Direction  of  the  Department.  At  the  end  of  three 
years  from  the  contracting  of  the  debt  the  possessor  and  his  successor  are 
bound  to  pay  off  at  least  the  fifteenth  part  of  the  capital  itself. 

§  IX.  Extinction  of  Feudal  Relations,  Family  Settlements,  and  En- 
tails, by  Family  Resolution. 

Every  feudal  connection  not  subject  to  a  Chief  Proprietor,  every  family 
settlement  and  entail  may  be  altered  at  pleasure  or  entirely  abolished  by  a 
Family  Resolution,  as  is  already  enacted  with  reference  to  tiie  East  Prus- 
sian Fiefs  (except  those  of  Ermeland)  in  the  East  Prussian  Provincial  Law, 
Appendix  36. 

§  X.     Abolition  of  Villainage. 

From  the  date  of  this  Ordinance  no  new  relation  of  villainage, 
whether  by  birth,  or  marriage,  or  acquisition  of  a  holding,  or  by 
contract,  can  come  into  existence. 

§  XI.  With  the  publication  of  the  present  Ordinance  the  exist- 
ing condition  of  villainage  of  those  villains  with  their  wives  and 
children  who  possess  their  peasant-holdings  by  hereditary  tenures 
of  whatever  kind  ceases  entirely  both  with  its  rights  and  duties. 

§  XII.  From  Martinmas,  1810,  ceases  all  villainage  in  Our 
entire  States.  From  Martinmas,  1810,  there  shall  be  only  free  per- 
sons, as  this  is  already  the  case  upon  the  Domains  in  all  Our  prov- 
inces; free  persons,  however,  still  subject,  as  a  matter  of  course,  to 
all  the  obligations  which  bind  them  as  free  persons  by  virtue  of 
the  possession  of  an  estate  or  by  virtue  of  r,  special  contract. 

To  this  declaration  of  Our  royal  Will  every  man  whom  it  may  concern, 
and  in  particular  Our  provincial  and  other  governments,  are  exactly  and 
loyally  to  conform  themselves,  and  the  present  Ordinance  is  to  be  made 
universally  known. 

Authentically,  under  Our  royal  Signature.  Given  at  Memel,  Oct.  9th, 
1807. 

Friedrich  Wiliielm, 
Schrotter,  Stein,  Schrotter  II. 


),S| 


1 


\Ma 


98 


ECONOMIC  HISTORY. 


Ilk' 

It"  ■! 

f 


i ' 


1%?' 


The  elder  Schrotter  was  at  this  time  minister  for  the  prov- 
ince of  Prussia,  and  he  with  his  brother  was  entrusted  with 
the  task  of  publishing  the  Ordinance  in  the  province  where 
it  had  received  the  king's  signature.  It  is  for  this  reason 
that  their  names  are  affixed  to  it  along  with  Stein's. 

That  threefold  character  of  the  edict  which  was  pointed 
out  above  will  appear  very  visibly  by  observing  the  three 
groups  of  sections,  which  on  account  of  their  especial  impor- 
tance have  been  printed  in  large  type.  The  abolition  of  caste 
both  in  land  and  in  persons  is  accomplished  in  the  first  two 
sections;  the  abolition  of  villainage  in  the  last  three,  which 
it  is  evident  might  as  well  have  composed  a  separate  edict. 
Sections  six  and  seven  arc  introduced  to  prevent  the  system 
of  free  trade  in  land  from  bearing  too  hard  on  the  peasant 
and  making  the  proprietorship  of  land  a  monopoly  of  the 
richer  classes.  ... 


THE  AGRARIAN  LEGISLATION  OF   HARDENBERG. 


f 


m  '• 


: 


I'! 


From  Morieu's  "  The  Agrarian  Legislation  of  Prussia  during 
THE  present  Century,"  in  "Systems  of  Land  Tenure  in  vari- 
ous Countries."  *    pp.  306-316. 

1811. 

The  edict  of  1807,  great  and  incisive  as  had  been  its 
operation,  Avas  of  a  negative  kind.  It  removed  disabili- 
ties, undid  the  shackles  which  bound  the  peasant  to  the 
glebe,  allowed  such  rights  as  existed  to  be  used  freely,  and 
pulled  down  the  walls  which  separated  from  each  other  the 
different  classes  of  society.  But  it  created  no  new  forms  of 
property ;,  it  proclaimed  freedom  of  exchange,  but  it  did  not 
provide  the  title-deeds  required  as  the  first  condition  of  ex- 
change. Peasants'  land  could  now  be  held  indiscriminately 
by  all  the  citizens  of  the  State;  but  it  was  still  held  under 
the  old  forms  of  tenure;  there  were  still  two  "dominia. " 
The  lord  was  still  owner  of  the  peasants'  land,  but  had  no 

1  London  :  Macmillan  &  Co.,  1870. 


:!■■ 


EDICTS  OF  STEIN  AND  HARDENBERG. 


90 


right  to  its  possession.     The  peasant  was  free  but  was  not 
master  of  his  hibor. 

The  legislation  of  1811  stepped  in  to  remedy  this  state  of 
things,  and  applying  to  the  monarchy  generally  the  princi- 
ples which  during  the  last  three  years  had  proved  in  the 
highest  degree  successful  when  applied  to  the  State  domains, 
it  set  itself  to  substitute  allodial  ownership  for  feudal  ten- 
ure.    Its  work  was  in  the  highest  degree  positive. 

The  legislation  of  1811  mainly  consists  of  two  great 
edicts,  both  bearing  the  same  date,  that  of  the  14th  of  Sep- 
tember,—  the  one  entitled  "Edict  for  the  Regulation  of  the 
Ilelations  between  the  Lords  of  the  Manor  and  their  Peas- 
ants ;  "  the  other,  "  Edict  for  the  better  Cultivation  of  the 
Land." 

The  first  is  concerned  with  the  creation  of  new  title-deeds 
for  the  peasant  holders,  and  with  the  commutation  of  the 
services  rendered  in  virtue  of  the  old  title-deeds. 

The  second  surveys  the  whole  field  of  agrarian  reform,  and 
introduces  general  measures  of  amelioration. 

The  preamble  to  the  "  Edict  for  the  Regulation  of  the  Re- 
lations l)etween  Landlord  and  Tenant "  recites  how  "  We, 
Frederick  William,  by  the  grace  of  God,  King  of  Prussia,  hav- 
ing convinced  ourselves,  both  by  personal  experience  in  our 
o\vn  domains,  and  by  that  of  many  lords  of  manors,  of  the 
great  advantages  which  have  accrued  Ixjfh  to  the  lord  and  to 
the  peasant  by  the  transformation  of  peasant  holdings  into 
property,  and  the  commutation  of  the  services  and  dues  on 
the  basis  of  a  fair  indemnity,  and  having  consulted,  in  re- 
gard to  this  weighty  matter,  experienced  farmers,  and  skilled 
persons  of  all  kinds  belonging  to  all  our  provinces,  and  to 
all  ranks  of  our  subjects,  ordain  and  decree  as  follows:" 

The  edict  then  branches  off  into  two  main  parts, —  the 
first  dealing  with  peasant  holdings  in  which  the  tenant  has 
hereditary  rights;  the  second  with  holdings  in  which  the 
tenant  has  no  hereditary  rights. 


•I 


■■■■m 

-4 


:i  in- 


■■ii* 


100 


ECONOMIC  HISTORY. 


f 


PART  I, 

All  tenants  of  hereditary  holdings,  that  is,  holdings  which 
are  inherited  according  to  the  common  law,  or  in  which  the 
lord  of  the  manor  is  bound  to  select  as  tenant  one  or  other 
of  the  heirs  of  the  last  tenant,  whatever  the  size  of  the  holding, 
shall  by  the  present  edict  become  the  proprietors  of  their 
holdings,  after  paying  to  the  landlord  the  indemnity  fixed 
hy  this  edict.  On  the  other  hand,  all  claims  of  the  peasant 
on  the  manor,  for  the  keeping  in  repair  of  his  farm-buildings, 
etc.,  shall  cease. 

We  desire  that  landlords  and  tenants  should  of  themselves 
come  to  terms  of  agreement,  and  give  them  two  years  from 
the  date  of  the  edict  to  do  so.  If  within  that  time  the  work 
is  not  done,  the  State  will  undertake  it. 

The  rights  to  be  commuted  may  be  thus  generally  classed :  — 

I.  Rights  of  the  landlord. 

1.  Right  of  ownership  ("dominium  directum  "). 

2.  Claim  to  services. 

3.  Dues  in  money  and  kind. 

4.  Dead  stock  of  the  farms. 

5.  Easements  or  servitudes  on  the  land  held. 

II.  Rights  of  the  tenant.  ^ 

1.  Claim  to  assistance  in  case  of  misfortune. 

2.  Right  to  gather  wood  and  other  forest  rights  in  the 

forest  of  the  manor. 

3.  Claim  upon  the  landlord  for  repairs  of  buildings. 

4.  Claim  upon  the  landlord  in  case  tenant  is  unable  to 

pay  public  taxes. 

5.  Pasturage  rights  on  demesne  lands  or  forests. 

Of  these  different  rights  only  a  fcAv,  namely,  the  dues  paid 
in  kind  or  money,  the  dead  stock  and  the  servitudes,  are  capa- 


1  It  is  worthy  of  remark  that  the  tenant's  "  dominium  utile,"  or  right  of  pos- 
session, is  not  recorded  as  a  set-off  against  tlie  dominium  directum  of  the  lord 
of  the  manor.  The  fact  is,  tliis  riglit  of  possession  is  something  so  self-under- 
stood, that  it  never  seems  present  to  the  mind  of  the  legislator.  The  "  domin- 
ium directum  "  is  something  quite  different,  for  it  represents  an  aggregation  of 
all  kinds  of  different  rights.  These  rights  he  has  to  sell  to  the  peasant,  and 
the  peasant  buys  them  with  the  only  thing  he  possesses,  viz.,  the  land. 


EDICTS   OF  STEIN  AND  IIAItDENBERG. 


101 


to 


pos- 
lord 
Kler- 
niin- 
)n  of 
and 


ble  of  exact  valuation.     The  others  can  only  be  approxi- 
mately estimated. 

To  obtain,  therefore,  a  solid  foundation  for  the  work  of 
commutation,  and  not  to  render  it  nugatoi-y  by  difficulties  im- 
possible to  bo  overcome,  we  deem  it  necessary  to  lay  down 
certain  rules  for  arriving  at  this  estimate,  and  to  deduce 
those  rules  from  the  general  principles  laid  down  by  the  laws 
of  the  State.     These  principles  are :  — 

1.  That  in  the  case  of  hereditary  holdings,   neither  the 

services  nor  the  dues  can,  under  any  circumstances, 
be  raised. 

2.  That  they  must,  on  the  contrary,  be  lowered  if  the  holder 

cannot  subsist  at  their  actual  rate. 

3.  That  the  holding  must  be  maintained  in  a  condition 

which  will  enable  it  to  pay  its  dues  to  the  State. 

From  these  three  constitutional  principles,  as  well  as 
from  the  geneval  principles  of  public  law,  it  follows  that  the 
right  of  the  State,  both  to  ordinary  and  extraordinary  taxes, 
takes  precedence  of  every  other  right,  and  that  the  services 
to  the  manor  are  limited  by  the  obligation  which  the  latter 
is  under  to  leave  the  tenant  sufficient  means  and  to  pay 
taxes. 

We  consider  that  both  these  conditions  are  fulfilled  when 
the  sum-total  of  the  dues  and  services  rendered  to  the 
manor  do  not  exceed  one-third  of  the  total  revenue  de- 
rived by  an  hereditary  tenant  from  his  holding.  Therefore, 
with  the  exceptions  to  be  hereafter  descriLicd,  the  rule  shall 
obtain: 

That  in  the  case  of  hereditary  holdings  the  lords  of  the 
manor  shall  be  indemnified  for  their  rights  of  ownership  in 
the  holding,  and  for  the  ordinary  services  and  dues  attached 
to  the  holding,  when  the  tenants  shall  have  surrendered  one 
third  portion  of  all  the  lands  held  by  them,  and  shall  have 
renounced  their  claims  to  all  extraordinary  assistance,  as 
well  as  to  the  dead  stock,  to  repairs,  and  to  the  payment  on 
their  behalf  of  the  dues  to  the  State  when  incapable  of 
doing  so.  . 


','■:* 


^*,  > 


m 


i 


'  i 


'-U 


102 


ECONOMIC  HI  STORY. 


si' 


1 3' 

1 

i1 


is 


if. 


The  edict  then  goes  on  to  lay  down  the  rules  to  be  ob- 
served in  a})j)lying  this  principle. 

These  rules  presuppose  the  existence  of  the  agricultural 
eonununity  referred  to  in  the  earlier  part  of  this  paper, 
namely,  equal  allotments  in  an  arable  mar'*' ;  the  division 
of  the  arable  mark  in  which  these  several  allotments  arc 
situated  into  three  "  Commonable  Fields, "  or  "  Fluren ; "  a 
common  system  of  cultivation  obligatory  on  the  community, 
in  order  to  secure  the  community's  right  of  pasture  on 
the  fallow  and  stubbles;  and  common  rights  of  property  in 
common  lands  occupied  "de  indiviso,"  mostly  pasture  lands, 
woods,  etc.,  but  sometimes  also  in  arable  common  lands. 
As  the  rule,  the  lord  of  the  manor  is  to  acquire  possession 
of  one  of  the  three  Fields,  or  of  one  third  portion  of  each 
held,  and  of  one  third  portion  of  the  common  lands. 

Wc  have  no  space  to  enter  into  the  details  of  the  ar- 
rangements which  provide  for  the  cases  differing  from 
these. 

As  noted  above,  the  lords  and  the  peasants  are  left  free  to 
make  what  arrangements  they  j)leasc,  as  long  as  the  propor- 
tion of  one  third  is  maintained;  that  is,  the  indemnity  may 
take  the  form  of  a  payment  of  capital,  or  of  a  corn  or  money 
rent.  Yet  the  rule  to  be  followed  (and  a  departure  from  this 
rule  must  have  a  distinct  motive)  is  that  the  indemnity  must 
be  paid  in  land  where  the  holdings  are  over  fifty  "morgen,"i 
but  in  the  shape  of  a  corn-rent  where  the  holdings  are  under 
that  size. 

As  a  matter  of  practical  convenience  to  both  parties,  the 
absolute  separation  of  proprietary  rights  suffers  some  few 
exceptions;  the  first  and  most  important  is  that  the  lord 
retains  the  right  of  pasturing  the  manorial  sheep  on  two 
thirds  of  the  fallow  and  stubbles  of  the  arable  mark;^  the 
peasant  also  continues  to  enjoy  the  right  of  collecting  as 
much  firewood  in  the  demesne  as  he  requires  for  his  per- 

>  The  Prussian  acre  is  about  equal  to  two  thirds  of  an  English  acre,  an 
hundred  English  acres  being  equal  to  158^  Prussian  acres. 

''■  Compare  Rogers'  "  History  of  Agriculture  and  Prices  in  England,"  vol.  i. 
p.  31. 


EDICTS  OF  STEIN  AND  HARDENIiEllG. 


103 


sonal  use.  For  this  right  and  for  the  acquisition  oi  his  house 
and  farm-buildings  as  well  as  his  garden-plot  (his  allot- 
ment in  the  mark  of  the  township)  he  continues  to  render 
services  to  the  lord  of  the  manor  at  times  (for  example,  har- 
vest)  when  extra  hands  are  wanted.  These  services  are 
however  restricted  to  a  maximum  of  ten  days  of  team- 
work, and  ten  days  of  hand-labor  for  a  team-peasant,  and 
ten  days'  man's-work  and  ten  days'  womau's-work  for  a  hand 
peasant. 

Several  paragraphs  of  the  edict  are  taken  up  with  provi- 
sions tor  so  aj)portioning  the  burdens  on  the  holdings  that 
nothing  shall  prevent  their  dismemberment,  and  being  sold 
or  exchanged  in  single  parcels.  Among  these  provisions  is 
one  preventing  the  peasant  from  mortgaging  his  estate  above 
one  fourth  of  its  value.  Where  corn-rents  are  not  paid 
punctually  the  lord  of  the  manor  can  exact  services  instead. 

PART  II. 

The  class  of  holdings  treated  of  in  the  second  part  are 
those  held  at  will,  or  for  a  term  of  years  or  for  life.  In 
these  cases  the  landlord  gets  an  indenmity  of  one  half  of  the 
holdings  under  much  the  same  conditions  as  in  the  case  of 
the  hereditary  holdings.  When  the  conditions  differ  they 
do  so  in  favor  of  the  lord  of  the  manor. 

By  the  edict,  of  which  the  above  arc  the  main  provisions, 
entirely  new  conditions  of  land  occupation  were  inaugurated, 
and  corresponding  changes  became  necessary  in  the  other 
branches  of  the  agricultural  system. 

The  "Edict  for  the  better  Cultivation  of  the  Land,"  pub- 
lished on  the  same  day,  had  these  changes  in  view. 

Fully  to  understand  what  these  changes  were,  and  what 
was  the  nature  of  the  agricultural  reforms  to  l)e  introduced 
into  Prussia,  the  picture  of  the  peasant  community  as  a  mi- 
crocosmic  reproduction  of  the  old  community  of  the  mark 
must  be  kept  in  mind.  The  ])easant  occupier's  tenement  is 
situated  apart  from  his  land  in  a  village  or  township;  his 
estate  is  made  up  of  a  number  of  single  lots  or  parcels 
(Grundstiickc)  distributed  over  the  three  main  divisions  or 


■  1 H . 


■'  'H 

'I-' 


,-ns 


104 


ECONOMIC  HISTORY. 


l\\\i 


h  t 


f 


i  V 


Fields  (Flurcn,  Campi)  into  which  the  arable  mark  is  di- 
vided. Often  intermixed  with  these  peasant  parcels,  and 
subject  to  the  same  obligatory  cultivation,  are  parcels  of  de- 
mesne lands.  In  addition  to  his  individual  rights  of  posses- 
sion in  the  arable  mark,  controlled  by  the  common  rights  of 
pasturage  on  the  stubbles,  he  has  common  rights  in  the 
common  pasture,  which  common  rights  he  shares  with  the 
lord  of  the  manor.  Besides  these  rights  he  has  rights  of 
pasture,  etc.,  in  the  forest  lands  of  the  demesne  proper.  T)'  ; 
sum  total  of  these  individual  and  common  rights  make  up 
the  peasant  holding,  correlative  to  which  are  the  services  to 
be  rendered  to  the  manor.  As  long  as  these  services  were 
calculated  on  the  sum  total  of  the  rights  enjoyed  by  the 
tenant,  it  was  of  paramount  importance  that  no  dismember- 
ment should  take  place.  Consequently,  even  in  the  case  of 
freeholders,  none  but  exceptional  dismemberments  were 
allowed. 

Apart  then  from  the  relations  between  landlord  and  ten- 
ant, or  rather  inseparably  implicated  in  those  relations,  and 
therefore  requiring  simultaneous  regulation  are  the  common 
rights  of  the  peasants  themselves,  and  the  impediments 
which  these  common  rights  throw  in  the  way  of  individual 
cultivation,  and  the  free  use  of  the  rights  of  property  to  be 
granted. 

The  ruling  idea  of  the  "Edict  for  the  better  Cultivation  of 
the  Land,"  as  of  its  predecessor,  and  indeed  of  the  whole 
legislation  connected  with  the  names  of  Stein  and  Harden- 
berg,  is  to  enfranchise  not  the  owner  of  land  merely,  but 
likewise  the  land  owned  by  him,  and  to  remove  every  im- 
pediment in  the  way  of  the  soil  finding  its  way  out  of  hands 
less  able  to  cultivate  it  into  those  better  able  to  cultivate 
it.  Conformably  to  these  principles,  the  edict  in  question, 
in  the  first  place,  removes  all  restrictions  still  existing  in 
the  way  of  free  exchange  in  land,  in  so  far  as  private  rights 
(namely,  rights  arising  from  entails,  servitudes,  etc.)  are 
not  affected.  By  this  proviso  the  restrictions  contained  in 
paragraphs  six  and  seven  of  the  edict  of  1807  were  removed, 
the  difference   between  tenant's   lands   and  demesne  land 


EDICTS   OF  STEIN  AND  HARDENBERG. 


105 


ceased,  and  the  lord  of  the  manor  could  freely  acquire  the 
i'ornior  without  the  previous  sanction  of  the  State.  On  the 
other  hand,  by  the  perfect  liberty  granted  for  dismemberment 
(the  maxim  being  laid  down  that  it  was  better  both  for  the 
cultivator  and  for  the  land  cultivated  that  the  former  should 
administer  a  small  unencumbered  estate  rather  than  a  hirge 
encumbered  one),  the  advocates  of  the  "petite  culture"  were 
conciliated.  Tlie  passage  in  the  edict  is  worth  quoting  in  ex- 
tenso,  as  it  contains  very  explicitly  what  we  have  described  as 
the  ruling  idea  of  the  legislation  we  are  discussing;  an  idea, 
it  is  true,  which  only  attained  its  full  development  forty 
years  later,  but  which,  nevertheless,  in  spite  of  the  obstacles 
thrown  in  its  way  by  the  successors  of  Stein  and  Ilardcnbcrg, 
took  sufhcient  root  even  at  this  early  period  to  enable  us  to 
judge  of  its  fruits.  It  is  the  idea  of  otvnership  versus  ten- 
ancij,  and  of  absolute  freedom  of  exchange  and  disposal; 
and  special  importance  attaches  to  it  as  representing  princi- 
ples opposed  both  to  the  French  system  of  compulsory  divi- 
sion and  to  the  English  system  of  tenancy,  primogeniture, 
and  strict  settlement.  The  passage  we  refer  to  runs  on  as 
follows:  ^ 

"The  proprietor  shall  henceforth  (excepting  always  where  the 
rights  of  tliird  parties  Jire  concerned)  be  at  liberty  to  increase  his 
estate,  or  diminish  it  by  buying  or  selling,  as  may  seem  good  to 
him.  He  can  leave  the  appurtenances  thereof  (the  *  grund* 
stiicke,'  or  parcels  distributed  in  the  three  Fields)  to  one  heir  or  to 
many,  as  he  pleases.  He  may  exchange  them  or  give  them  away, 
or  dispose  of  them  in  any  and  every  legal  way,  without  requiring 
any  authorization  for  such  changes. 

"This  unlimited  right  of  disposal  has  great  and  manifold  advan- 
tages. It  affords  the  safest  and  best  means  for  preserving  the  pro- 
prietor from  debt,  and  for  keeping  alive  in  him  a  lasting  and  lively 
interest  in  the  improvement  of  his  estate,  and  it  raises  the  general 
standard  of  cultivation. 

"Tlie  first  of  these  results  is  obtained  by  the  power  it  gives  to 
the  actual  proprietor,  or  to  an  heir  upon  entering  on  his  estJite,  to 
sell  such  portions  as  will  enable  him  to  provide  for  his  heirs  or  co- 
heirs, as  the  case  may  be,  or  for  any  other  extraordinary  emer- 


■'m\ 


.  M 


106 


ECONOMl  C   ins  TOR  1'. 


f 


..  ^ 


gency,  leaving  what  roinaius  of  the  property  unencumbered  with 
mortgji^cs  or  Hettleinents. 

"Tile  interest  in  tlie  estate  is  ke])t  alive  by  tiie  freedom  left  to 
l)arents  to  divide  their  estate  among  their  children  as  they  think 
fit,  knowing  that  the  benefit  of  every  improvement  will  be  reaped 
by  them. 

"  Lastly  tlie  higher  standard  of  cultivation  will  be  secured  by 
land — which  in  the  hands  of  a  proprietor  without  means  would 
necessarily  deteriorate  —  getting  into  the  hands  of  a  proprietor 
with  means,  and  therefore  able  to  make  the  best  of  it.  Without 
this  power  of  selling  portions  of  his  property,  the  proprietor  is  apt 
to  sink  deeper  and  deeper  into  debt,  and  In  pro])()rtion  as  he  does 
so  the  soil  Is  deprived  of  its  strength.  I'y  selling,  on  the  other 
hand,  he  becomes  free  of  debt  and  free  of  care,  and  obtains  tlie 
means  of  i)roperly  cultivating  what  remains  to  him.  Hy  this  un- 
hindered movement  in  the  possession  of  laml,  the  whole  of  the 
soil  remains  in  a  good  state  of  cultivation;  and  this  point  once 
attained,  increased  industry  and  exertion  will  make  it  possible  to 
attain  a  yet  higher  [)oint;  whereas  a  backward  movement,  except 
as  the  result  of  extraordinary  miscliances  from  without,  is  not  to 
be   apprehended. 

"I)ut  there  is  yet  another  advantage  springing  from  this  power 
of  piecemeal  alienation  which  is  well  worthy  of  attention,  and 
which  fills  our  paternal  heart  with  especial  gladness.  It  gives, 
namely,  an  opportunity  to  the  so-called  small  folk  (kleine  Leute), 
cottiers,  gardeners,  boothmen,  and  day  laborers,  to  ac(piire  landed 
property,  and  little  by  little  to  increase  it.  The  pros[iect  of  such 
acquisition  will  render  this  numerous  and  useful  class  of  our  sub- 
jects industrious,  orderly,  and  saving,  inasmuch  as  thus  only  will 
they  be  enabled  to  obtain  the  means  necessary  to  tlie  ])urchase  of 
land.  ]\Iany  of  them  will  be  able  to  work  their  way  u])wards,  and 
to  acquire  jiropcrtj',  and  to  make  themselves  remarkable  for  their 
industr}'.  The  State  will  acquire  a  new  and  valuable  class  of  in- 
dustrious proprietors;  by  the  endeavor  to  become  such,  agriculture 
will  obtain  new  hands,  and  by  increased  voluntary  exertion,  more 
work  out  of  the  old  ones." 


fK 


The  edict  next  exacts  as  a  supplementary  measure  to  the 
"Edict  for  the  Regulation  of  the  Relations  between  Lords 
of  the  Manor  and  their  Peasants,"  that  in  the  case  of  heredi- 


m 


EDICTS   OF  STlilN  AND  llARDENUEna. 


107 


tary  IcasL'liolds  (Krbpiioliti')  Iho  services  and  fmos  amy  bo 
comiuiitcd  into  ix'nt-cliar,ir<'s,  andtla-bv  leut-cluirges  redeemed 
by  a  capital  payment  ealeiilaled  at   lour  per  ci'iit. 

It  next  proceeds  to  deal  with  the  common  rlijhts  of  tlic  peas- 
ants and  of  tlie  lords;  and  hero  it  fairly  owns  its  inability  to 
carry  out  the  prineiitle  of  the  free  owner  on  the  free  soil. 
Tlio  great  mass  of  the  peasant  holdings  are  disjiersed  in 
small,  ()j)en,  "commonable,"  int((rmi.\ed  fields  over  the  arc!U 
of  the  arable  mark;  and  the  coinmoii  rights  of  pasturage  over 
the  arable  mark  necessarily  chain  down  the  individual  culti- 
vator to  the  modes  of  cultivation  compatil)le  with  these  com- 
mon I'ights.  To  disentangle  this  complicated  wel)  must  be 
the  work  of  time  ami  of  special  legislation.  The  edict  there- 
fore amiounces  a  future  law  on  the  subject,  and  for  the  pres- 
ent conlines  itself  to  making  jtrovisions  by  which  one  third 
part  of  such  "  commonal}le  "  fields  can  be  freed  from  the  com- 
mon rights  of  pasturage  and  placed  at  the  absolute  disposal 
of  individual  i)roprietors.  The  rights  of  pasturage  in  the 
forest  lands  of  the  manor  are  more  easily  dis|)osed  of.  The 
advantageous  terms  on  which  full  rights  of  property  are 
obtainable  by  the  peasants  render  it  i)ossiblc  to  make  strin- 
gent regulations  in  regard  to  the  exercise  of  those  rights, 
in  the  interest  of  the  landlord  and  for  the  preservation  of 
the  forests. 

To  guard  against  the  possibility  of  a  return  to  the  double 
ownershij)  system,  the  edict  lays  down  the  rule  that  though  a 
landed  proprietor  may  settle  laborers  on  his  estate,  and  pay 
for  their  services  in  land,  sm^h  contracts  are  never  to  be 
made  for  more  than  twelve  years. 

The  edict  concludes  by  expressing  it  to  be  his  Majesty's 
wish  and  will  that  agricultural  societies  should  be  formed  in 
every  ]»art  of  the  country  for  the  purpose  of  collecting  and 
diffusing  knowledge.  Tbe  ex))enses  of  these  societies  and 
the  salaries  of  their  secretaries  will  be  ))aid  out  of  the 
exchequer,  and  the  societies  themselves  will  be  placed  in 
communication  with  a  central  oftice  in  the  capital,  whoso 
business  it  will  also  be  to  establish  and  maintain  model 
farms  in  various  parts  of  the  country  for  the  diffusion  of 


m 


'■•is! 

■  r*s 
'5  Tftj 


t-';T 


i 

li 

1 

j 

'*1 

1 

1 

108 


ECONOMIC  HISTORY. 


agricultural  knowlidjio.  JJesidoa  this  more  or  loss  unoflicial 
nmchinory,  [(rovisiuii  is  muilc  tor  olliciul  aj^riciiltiinil  Ixianls 
to  l)e  i'stablisliL'ii  in  cacli  district;  but  these  arrangements, 
having  Ijcen  suporscdod  by  subaequcut  legiBlutiou  need  not 
be   referred  to. 

Tho  two  edicts  of  the  14th  of  September,  1811,  may  be 
considered  as  the  culminating  point  of  the  legislation  which 
goes  by  the  name  of  iStein  and  Ihirdcuberg. 


h,i 


f 


I. 


I 


u 


li.ii- 


'I 


m  * 


F 1 ;  is , 


i: 


Im 


THE   OIWERS  JN  COUNCIL. 


109 


V. 


THE  ORPERS   IN  COUNCIL. 


Fkom  Levi's  IIistouy  ok  Bkitisii  Cummekck'  ('Jded.),  ri-.  101-113. 


T 


IIP]  political  horizon  was  ominously  dark  at  the  com- 
nH-nccnicnt  of   tlu*  ninotocnth  century.     While  frricv- 
ously  siilTcrinjj;  from  the  hiujh  prices  of  corn  and  provisions 


th< 


den  of 


contest  already  suHiciently 
prohjnj^ed,  Eni^lanil  was  threatened  by  tho  renewal  of  an- 
other armed  neutrality  on  the  part  of  the  Northern  powers, — 
a  neutrality  l)ascd  on  a  new  code  of  maritime  law  then 
deemed  utterly  inconsistent  with  the  rijrhts  of  this  country. 
The  Northern  powers  wished  to  ])roclaim  that  free  ships 
should  make  free  goods ;  hut  En<^land  was  determined  that 
the  trade  of  tho  enemy  should  not  he  carried  on  by  neutrals. 
The  Northern  powers  asserted  that  only  contraband  goods 
should  be  excluded  from  the  trade  of  neutrjils,  and  th(>sc  of 
certain  definite  and  known  articles.  Enghmd  did  not  wish 
tho  enemy  to  obtain  timber,  hemp,  and  other  articles,  which, 
though  not  contraband  of  war,  arc  still  essential  for  warfare. 
The  Northern  powers  declared  that  no  blockade  should  bo 
held  valid  unless  real.  England  had  already  assumed  tho 
right  to  treat  whole  coasts  as  blockaded  in  order  to  prevent 
the  enemy  receiving  supplies  from  any  quarter.  And  when 
the  Northern  powers  adde(l  that  a  merchant  vessel  accom|)a- 
nied  and  protected  by  a  Ixdligcrent  ship  ought  to  I)e  safe  from 
the  right  of  search,  England  was  not  prc^pared  to  recognize 
the  authority  of  such  ships,  and  would  place  no  limit  to  the 
action  of  her  cruisers.  When,  therefore,  Russia,  Denmark, 
and  Sweden  entered  into  a  convention  to  enforce  tho  princi- 


■M 


London :  John  Murray,  1880. 


I  In 
lit-. 


I    \ 


110 


ECONOMIC  HISTORY. 


pics  of  the  armed  neutrality,  and  in  pursuance  of  the  same 
Russia  caused  an  embargo  to  be  laid  on  all  British  vessels  in 
her  ports,  the  British  Government,  ill-disposed  to  bear  with 
such  provocation,  issued  a  proclamation  on  Jan.  14,  1801, 
authorizing  reprisals,  and  laying  an  embargo  on  all  Russian, 
Swedish,  and  Danish  vessels  in  British  ports.  What  fol- 
lowed IT  well  known,  and  with  the  battle  of  Copenhagen 
the  Northern  confederacy  was  completely  dissolved.  By  this 
time  Mr.  Pitt  had  given  in  his  resignation,  and  a  change  of 
government  took  place,  which  led  to  a  change  of  jiolicy 
towards  France,  and  to  negotiations  which  ended  with  the 
conclusion  of  the  treaty  of  Amicus.* 

But,  alas !  from  whatever  cause  it  was,  that  peace  was  of 
short  duration,  and  more  than  ever  the  patriotic  spirit  of  the 
people  was  evoked  to  defend  British  soil  against  Britain's 
inveterate  enemies.^  From  class  to  class  the  national  enthu- 
siasm spread  and  increased,  and  even  the  merchants,  setting 
aside  their  books  and  business,  issued  v  declaration  promis- 
ing in  a  solemn  manner  to  use  every  exertion  to  rouse  the 
spirit  and  to  assist  the  resources  of  the  kingdom;  to  be  ready 
with  their  services  of  every  sort  and  on  every  occasion  in  its 
defence,  and  rather  to  perish  altogether  than  live  to  see  the 
honor  of  the  British  name  tarnished,  or  that  sublime  inheri- 
tance of  greatness,  glory,  and  liberty  destroyed,  Avhich  de- 
scended to  them  from  their  forefathers,  and  which  they  Avere 
determined  to  transmit  to  their  posterity.  Again  was  Mr. 
Pitt  called  to  be  prime  minister,  as  the  only  man  who  could 
really  be  trusted  in  times  of  so  much  anxiety  and  peril. 
And  then  it  was  that  that  continental  system  was  inaugu- 
rated which  made  of  oceans  and  seas  one  vast  battle-field  of 
strife  and  bloodshed. 

i''ully  to  understand  the  policy  of  this  country  as  regards 

1  Peace  was  ratified  on  October  10,  1801;  and  the  treaty  of  Amiens  was 
concluded  Marcli  2o,  1802. 

'■^  On  May  10,  1803,  an  order  in  council  was  made,  issuing  letters  of  marque 
and  reprisals  against  France,  and  another  laying  an  onihargo  on  all  ships  be- 
longing to  tlie  French  and  Batavian  republics.  Reprisals  against  Spain  were 
ordered  Deceniber  19,  1805;  against  Prussia  on  May  14,  1806;  and  against 
Russia  on  December  18,  1807. 


(iff 

i  ■ 


THE  ORDERS  IN  COUNCIL. 


Ill 


these  orders  in  council,  we  must  briefly  retrace  our  steps  by- 
examining  tlie  measures  talcen  in  previous  wars.  During  the 
Seven  Years'  War,  which  ended  in  1763,  France,  hemmed  in 
on  all  sides  by  England  and  hindered  by  the  British  naval 
force  from  carrying  on  any  trade  with  her  West  India  colo- 
nies, adopted  the  plan  of  relaxing  her  colonial  monopoly,  and 
allowing  neutral  ships  to  carry  the  produce  of  those  islands 
to  French  or  foreign  ports  in  Europe.  The  produce  being 
thus  carried  really  or  ostensibly  on  neutral  account,  it  was 
assumed  that  no  danger  of  capture  could  be  incurred.  But 
the  prize  courts  of  England  condemned  such  vessels  as  were 
captured  while  engaged  in  the  trade,  and  the  rule  was  then 
adopted,  called  the  rule  of  1756,  ^  that  a  neutral  has  no  right 
to  deliver  a  belligerent  from  the  pressure  of  his  enemy's 
hostilities  by  trading  Avltii  his  colonics  in  time  of  war  in  a 
way  tliat  was  prohil)ited  in  time  of  peace.  As  Sir  William 
Scott  said,  "The  general  rule  is  that  the  neutral  has  a  right 
to  carry  on  in  time  of  war  his  accustomed  trade  to  the 
utmost  extent  of  which  that  accustomed  trade  is  capable. 
Very  different  is  the  case  of  a  trade  which  the  neutral  has 
never  possessed ;  which  he  holds  by  no  title  of  use  and  habit 
in  time  of  peace;  and  which,  in  fact,  he  can  obtain  in  war 
by  no  other  title  than  by  the  success  of  the  one  belligerent 
against  the  other,  and  at  the  expense  of  that  very  belligerent 
under  whose  success  he  sets  up  his  title."  During  the 
American  war  this  principle  did  not  come  practically  into 
action,  because,  although  then  also  the  French  government 
opened  the  ports  of  her  West  India  islands  to  the  ships  of 
neutral  powers,  it  had  the  wisdom  to  do  so  before  hostilities 
were  commenced,  and  not  after. 

In  accordance  with  these  iirinoiples,  when  the  war  of  the 
French  Revolution  commenced,   instructions  were  given  on 

'  The  rule  of  1750  had  been  acted  upon  even  by  France  on  previous  ocra- 
sions.  See  Note  1,  On  .he  practice  of  the  Rritish  Prize  Courts  with  regard  to 
the  Colonial  trade  of  the  Enemy  durii^g  tlie  American  War,  in  0  Rob  Rep. 
App. ;  and  Consid^rathms  siir  /'Admission  des  Narires  neutres  aux  Colonies  fran- 
^oisfs  de.  I'Am&ique  en  Terns  de.  Guerre,  p.  13,  1779;  and  see  the  Wiihelmina, 
4  Hob.  Rep.,  p.  4;  and  the  Inimanuel  Tudor  —Leading  'Cnses  of  Mercantile 
Law,  p  814. 


'5f 


^,1 


'-  n 


Vm 


112 


ECONOMIC  HISTORY. 


Nov.  6,  1793,  to  the  commanders  of  British  ships  of  war  and 
privateers,  ordering  them  "to  stop  and  detain  for  lawful 
adjudication  all  vessels  laden  with  goods,  the  produce  of  any 
French  colony,  or  carrying  provisions  or  other  supplies  for 
the  use  of  any  such  colony."  And  this  order  was  the  more 
necessary  from  the  fact  that  American  ships  were  crowding 
the  ports  of  the  French  West  Indies,  where  the  flag  of  the 
Unit.^d  States  was  made  to  protect  the  property  of  the  French 
planters.  Great  numbers  of  ships  under  American  colors 
were  thus  taken  in  the  West  Indies  and  condemned,  the 
fraudulent  pretences  of  neutral  pi-opcrty  in  the  cargoes  being 
too  gross  to  be  misunderstood.  Complaints  were,  however, 
made  of  the  hardshii)s  of  this  practice  on  the  bona  fide 
American  trader,  and  in  January,  1794,  the  instructions 
■were  so  far  amended  that  the  direction  was  to  seize  "such 
vessels  as  were  laden  with  goods  the  produce  of  the  French 
West  India  Islands,  and  comimj  directly  from  any  ports  of 
the  said  inlands  to  Uurope."  This  rule  continued  in  force 
till  1798,  when  again  it  was  relaxed  by  ordering  that  vessels 
should  be  seized  "  laden  with  the  produce  of  any  island  or 
settlement  of  France,  Spain,  or  Holland,  and  coming  di- 
rectly from  any  port  of  the  said  island  or  settlement  to  any 
port  in  Europe,  not  being  a  port  of  this  kingdom,  or  of  the 
country  to  which  the  vessel,  being  neutral,  should  belong," 
European  neutrals  M'cre  thus  permitted  to  bring  the  produce 
of  the  hostile  colonies  from  thence  to  ports  of  their  own  coun- 
tries; and  European  or  American  neutral  ships  might  carry 
such  produce  direct  to  England.  But  when  the  war  was  re- 
sumed in  1803  the  rule  of  1798  was  again  put  in  force,  and 
instructions  were  given  "not  to  seize  any  neutral  vessels 
which  should  be  foimd  carrying  on  trade  directly  between 
the  colonics  of  the  enemy  and  the  neutral  country  to  which 
the  vessel  belonged,  and  laden  with  property  of  the  inhabi- 
tants of  such  neutral  country,  provided  that  such  neutral 
vessel  should  not  be  supplying  nor  should  have  on  the  out- 
ward voyage  supplied  the  enemy  with  any  articles  of  contrar 
band  of  war,  and  should  not  be  trading  with  any  blockaded 
ports. " 


lli 


It: 


THE   ORDERS  IN  COUNCIL. 


113 


By  thus  allowing,  however,  neutrals  to  trade  safely  to  and 
from  neutral  ports,  means  were  opened  to  them  to  clear  out 
for  a  neutral  port,  and  under  cover  of  that  pretended  desti- 
nation to  make  a  direct  voyage  from  the  colony  to  the  par- 
ent State,  or  really  to  proceed  to  some  neutral  country, 
and  thence  re-export  the  cargo  in  the  same  or  a  different 
bottom  to  whichever  European  market,  neutral  or  hostile, 
they  might  prefer.  The  former,  on  an  assumed  voyage  to 
the  parent  State,  being  the  shortest  and  most  convenient 
method,  was  chiefly  adopted  by  tlie  Dutch  on  their  homeward 
voyages,  because  a  pretended  destination  for  Prussian,  Swed- 
ish, or  Danish  ports  in  the  North  Sea  or  the  Baltic  was  a 
plausible  mask,  even  in  the  very  closest  approach  the  ship 
might  make  to  the  Dutch  coast  down  to  the  moment  of  her 
slipping  into  port.  The  latter  method,  or  the  stopping  at  an 
intermediate  neutral  country  was  commonly  preferred  by  the 
Spaniards  and  French  in  bringing  home  their  colonial  pro- 
duce, because  no  i)retcnded  neutral  destination  could  be  given 
that  would  consist  with  the  geograijhical  position  and  course 
of  a  ship  coming  directly  from  the  AVest  Indies,  if  met  with 
near  the  end  of  her  voyage  in  the  latitude  of  their  principal 
ports.  The  American  flag  in  particular  was  a  cover  that 
could  scarcely  ever  be  adapted  to  the  former  method  of  elud- 
ing our  hostilities,  but  it  was  found  peculiarly  convenient  in 
the  latter.  Such  is  the  i)osition  of  the  United  States,  and 
such  was  the  effect  of  the  trade-winds  that  European  vessels, 
homeward  bound  from  the  West  Indies,  could  touch  at  their 
ports  with  very  little  inc(nivenience  or  delay;  and  such  was 
also  the  case,  though  in  a  less  degree  with  regard  to  vessels 
coming  from  the  remotest  jjarts  of  South  America  or  the 
East  Indies.  The  passage  from  the  Gulf  of  Mexico,  espe- 
cially, runs  so  close  along  the  Xorth  American  shore  that 
shij)s  bound  from  the  Ilavannuh,  from  Vera  Cruz,  and  other 
great  Spanish  ports  bordering  on  that  gulf  to  Euroj)0  could 
touch  at  certain  ports  in  the  United  States  with  scarcely 
any  deviation.  On  an  outward  voyage  to  the  East  and  West 
Indies  the  proper  course  would  be  more  to  the  southward 
than  would  well  consist  with  touching  on  North  America; 

8 


•Hi 


1  '1 


114 


ECONOMIC  HISTORY. 


m 


I"'  '' 
H 


1 


a  ^ 


i\] 


yet  the  deviation  for  that  purpose  was  not  a  very  formidable 
inconvenience.  From  these  causes  the  protection  given  by 
the  American  flag  to  the  intercourse  between  our  European 
enemies  and  their  colonies  was  chiefly  in  the  way  of  a  double 
voyage,  in  which  America  was  the  half-way  house  or  central 
point  of  conmmnication.  The  fabrics  and  commodities  of 
France,  Spain,  and  Holland  were  brought  under  American 
colors  to  ports  in  the  United  States,  and  from  thence  re- 
exported under  the  same  flag  for  the  supply  of  the  hostile 
colonics.  Again,  the  produce  of  these  colonics  was  brought 
in  a  like  manner  to  the  American  ports  and  thence  reshipped 
to  Euroi)e.  But  the  Americans  went  still  farther.  The 
ports  of  this  kingdom  having  been  constituted  by  the  royal 
instructions  of  1798,  legitimate  places  of  destination  for 
neutrals  coming  with  cargoes  of  produce  directly  from  the 
hostile  colonies,  the  American  merchants  made  a  pretended 
destination  to  British  ports  a  convenient  cover  for  a  voyage 
from  the  hostile  colonies  to  Europe,  which  their  flag  could 
not  otherwise  give,  and  thus  rivalled  the  neutrals  of  the  old 
world  in  this  method  of  protecting  the  West  India  trade  of 
the  enemy,  while  they  nearly  engrossed  the  other.  As  the 
war  advanced,  after  the  Peace  of  Amiens,  the  neutrals  be- 
came bolder  and  more  aggressive.  American  ships  were 
constantly  ari'iving  at  Dutch  and  French  ports  with  sugar, 
coffee,  and  other  productions  of  the  French  and  Spanish 
West  Indies.  And  East  India  goods  were  imported  by  theru 
into  Sj)ain,  Holland,  and  France. 

By  these  and  other  means  Hamburgh,  Altona,  Emden, 
Gottenbiirgh,  Copenhagen,  Lisbon,  and  other  neutral  nuir- 
kets  were  glutted  with  the  produce  of  the  West  Indies  and 
the  fabrics  of  the  East,  brought  from  the  prosperous  colonies 
of  powers  hostile  to  this  country.  By  the  rivers  and  canals 
of  (Jermany  and  Flanders  these  were  floated  into  the  ware- 
houses of  the  enemy  or  circulated  for  the  supply  of  his  cus- 
tomers in  neutral  countries.  He  rivalled  the  British  planter 
and  merchant  throughout  the  continent  of  Europe,  and  in 
all  ports  of  the  Mediterranean,  and  even  supi)lanted  the 
manufacturers  of  Manchester,  Birmingham,  and  Yorkshire, 


i?i-    y 


mimm 


THE   ORDERS  IN  COUNCIL. 


115 


and  by  these  means  the  hostile  colonies  derived  benefit,  and 
not  inconvenience,  from  the  enmity  of  Great  Britain.  What 
moreover,  especially  injured  the  commerce  of  this  country 
was  the  increase  in  the  cost  of  imi)ortation  into  this  country 
from  the  British  colonics,  from  freight,  insurance,  and  other 
charges,  which  taken  together  were  as  much  as,  if  not  supe- 
rior to,  those  to  which  the  enemy  was  subjected  in  his  covert 
and  circuitous  trade.  It  was  a  general  complaint,  therefore, 
that  the  enemy  carried  on  colonial  commerce  imder  the 
neutral  flag  cheaply,  as  well  as  safely;  that  he  was  enabled 
not  only  to  elude  our  hostilities,  but  to  rival  our  mer- 
chants and  planters  in  the  European  markets;  that  by  the 
same  means  the  hostile  treasuries  were  filled  with  a  copious 
stream  of  revenue;  and  that  by  this  licentious  use  of  the 
neutral  flag,  the  enemy  was  enabled  to  employ  his  whole 
military  marine  for  purposes  of  offensive  war,  without  being 
obliged  to  maintain  a  squadron  or  a  ship  for  the  defence  of 
his  cohmial  ports.  It  was,  moreover,  contended  that,  since 
neutral  States  have  no  right,  but  through  our  own  gratuitous 
concession,  to  carry  on  the  colonial  trade  of  the  enemy,  we 
might  after  a  reasonable  notice  withdraw  that  ruinous  in- 
dulgence; that  the  neutral  did  not  require  such  principles; 
that  the  comparative  cheapness  of  his  navigation  gives  him 
in  every  open  market  a  decisive  advantage;  that  in  the  com- 
merce of  other  neutral  countries  he  could  not  fail  to  sup- 
plant the  belligerent;  and  that  he  obtained  an  increase  of 
trade  by  purchasing  from  one  belligerent  and  selling  to  his 
enemies  the  merchandise  for  which,  in  time  of  peace,  they 
depended  on  each  other. 

Such  complaints  made  against  neutral  States  found  a  pow- 
erful echo  by  the  publication  of  a  work  entitled  "  War  in 
Disguise  and  the  Frauds  of  the  Neutnl  Flag,"  supposed  1o 
have  been  written  by  Mr.  James  Stephen,  the  real  author  of 
the  orders  in  council.  The  British  government  did  not  see 
its  way  at  once  to  proceed  in  the  direction  of  prohibiting  to 
neutral  ships  the  colonial  trade,  which  they  had  enjoyed  for 
a  considerable  time ;  but  the  first  stop  was  taken  to  paralyze 
the  resources  of  the  enem}',  and  to  restrict  the  trade  of  neu- 


%    f  1 

-  ■(••si 


■'si 

■If 


if 


>«' 


I   (il 


it"    > 
f    i 


iffi. 


I 


m-  ' 


116 


ECONOMIC  HISTORY. 


trals  bj-  the  issue  of  an  order  in  council  in  May,  1806,  de- 
claring that  all  the  coasts,  ports,  and  rivers  from  the  Elbe  to 
Brest  should  be  considered  blockaded,  though  the  only  por- 
tion of  those  coasts  rigorously  blockaded  was  that  included 
between  Ostcnd  and  the  mouth  of  the  Seine,  in  the  ports  of 
which  preparations  were  made  for  the  invasion  of  England. 
The  northern  ports  of  Germany  and  Holland  were  left  partly 
open,  and  the  navigation  of  the  Baltic  altogether  free. 

Napoleon,  then  in  the  zenith  of  his  power,  saw  in  this  order 
in  council  a  fresh  act  of  wantonness,  and  iic  nict  it  by  the  is- 
sue of  the  Berlin  decree  of  Nov.  21,  1806.  In  that  document, 
remarkable  for  its  boldness  and  vigor,  Napoleon  charged  Ii^ng- 
land  with  having  set  at  naught  the  dictates  of  international 
law,  with  having  made  prisoners-of-Avar  of  private  individu- 
als, and  with  having  taken  the  crews  out  of  merchant  ships. 
He  charged  this  country  with  having  ca})tured  private  prop- 
erty at  sea,  extended  to  commercial  ports  the  restrictions 
of  blockade  applicable  only  to  fortified  places,  declared  as 
blockaded  places  which  were  not  invested  by  naval  forces, 
and  abused  the  right  of  blockade  in  order  to  benefit  her  own 
trade  at  the  expense  of  the  commerce  of  continental  States. 
He  asserted  the  right  of  combating  the  enemy  with  the  same 
arms  used  against  himself,  especially  when  such  enemy  ig- 
nored all  ideas  of  justice,  and  every  liberal  sentiment  which 
civilization  imposes.  He  announced  his  resolution  to  apply 
to  England  the  same  usages  which  she  had  established  in  her 
maritime  legislation.  He  laid  down  the  principles  which 
France  was  resolved  to  act  upon  until  England  should  recog- 
nize that  the  rights  of  war  are  the  same  on  land  as  on  sea, 
that  such  rights  should  not  be  extended  either  against  pri- 
vate property  or  against  persons  not  belonging  to  the  mili- 
tary or  naval  forces,  and  that  the  right  of  blockade  should 
be  restricted  to  fortified  places  truly  invested  by  sufficient 
forces.  And  upon  these  premises  the  decree  ordered :  1st, 
that  the  British  islands  should  be  declared  in  a  state  of 
bloci^adc;  2d,  that  all  commerce  and  correspondence  with 
Trii  'Jri^iah  islands  should  be  prohibited,  and  that  letters 
addriri:  .od  to  England  or  Englishmen  written  in  the  English 


J'- 


I    I 


THE  ORDERS  IN  COUNCIL. 


117 


lanj^uagc  should  be  detained  and  taken ;  3d,  that  every  Brit- 
ish subject  found  in  a  country  occupied  by  French  troops  or 
by  those  of  their  allies  should  be  made  a  prisoner-of-war; 
4th,  that  all  merchandise  and  property  belonginjr  to  British 
subjects  should  be  deemed  a  good  prize;  5th,  that  all  com- 
merce in  English  merchandise  should  be  prohibited,  and 
that  all  merchandise  belonging  to  England  or  her  colonies, 
and  of  British  manufacture,  should  be  deemed  a  good  prize ; 
and  Gth,  that  no  vessel  coming  direct  from  England  or  her 
colonies  be  allowed  to  enter  any  French  port  or  any  port 
subject  to  French  authority ;  and  that  every  vessel  which,  by 
means  of  a  false  declaration,  should  evade  such  regulations 
should  at  once  be  captured. 

The  British  government  lost  no  time  in  retaliating  against 
France  for  so  bold  a  course;  and  on  Jan.  7,  1807,  an  order 
in  council  was  issued,  which,  after  reference  to  the  orders 
issued  by  France,  enjoined  that  no  vessel  should  be  allowed 
to  trade  from  one  enemy's  port  to  another,  or  from  one  port 
to  another  of  a  French  ally's  coast  shut  against  English  ves- 
sels ;  and  ordered  the  commanders  of  the  ships  of  war  and  pri- 
vateers to  warn  every  neutral  vessel  coming  from  any  such 
port,  and  destined  to  another  such  port,  to  discontinue  her 
voyage,  and  that  any  vessel,  after  being  so  warned  which 
should  be  found  proceeding  to  another  such  port  should  be 
captured  and  considered  as  lawful  prize.  This  order  in  coun- 
cil having  reached  Napoleon  at  Warsaw,  he  immediately 
ordered  the  confiscation  of  all  English  merchandise  and  co- 
lonial produce  found  in  the  Ilanseatic  Towns.  Bourrienne, 
Napoleon's  commissioner  at  Ilamlnirg,  declared  that  all  who 
carried  on  trade  with  England  supported  England ;  that  it 
was  to  prevent  such  trading  that  France  took  possession  of 
IFamljurg;  that  all  English  goods  should  be  produced  by  the 
Ilamburghers  for  the  purpose  of  being  confiscated;  and  that 
in  forty-eight  hours,  domiciliary  visits  would  be  paid  and 
military  punishments  inflicted  on  the  disobedient.  But 
Britain  in  return  went  a  step  further,  and  by  order  in  coun- 
cil, Nov.  11, 1807,  declared  all  the  ports  and  places  of  France, 
and  those  of  her  allies  and  of  all  countries  where  the  English 


■a 


'X 


I 


,;i>'- 

i: 


It 


t 


^ 


!!!•     Ml 


f      I 


118 


ECONOMIC  HISTORY. 


flag  was  excluded,  cvoii  though  they  were  not  at  war  with 
Britain,  should  he  placed  under  the  same  restrictions  for  com- 
merce and  navigation  as  if  they  were  blockaded ;  and  conse- 
(juently  that  ships  destined  to  those  [)orts  should  be  liable  to 
the  visit  of  JJritish  cruisers  at  a  British  station,  and  thero 
subjected  to  a  tax  to  be  imposed  by  tlie  British  Parliament.^ 

Napoleon  was  at  !Milan  wlien  this  order  in  council  was 
issued,  and  forthwith,  on  December  17,  the  famous  decree 
appeared  l)y  which  he  imposed  on  neutrals  just  the  contrary 
of  what  was  prescribed  to  them  by  England,  and  further  de- 
clared that  every  vessel,  of  whatever  nation,  that  submitted 
to  the  order  in  council  of  November  11  sliould  l)y  that  very 
act  become  denationalized,  considered  as  British  property, 
and  condemned  as  a  good  prize.  The  decree  placed  the  Brit- 
ish islands  in  a  state  of  blockade,  and  ordered  that  every 
ship,  of  wliatever  nation,  and  with  whatever  cargo,  proceed- 
ing from  English  ports  or  English  colonies  to  countries 
occupied  by  English  troops,  or  going  to  England,  should  be  a 
good  prize.  This  England  answered  by  the  order  in  council 
of  April  2G,  1809,  which  revoked  the  order  of  1807  as  re- 
gards America,  but  confirmed  the  blockade  of  all  the  ports 
of  France  and  Holland,  their  colonies  and  dependencies. 
And  then  France,  still  further  incensed  against  England, 
issued  the  tariff  of  Trianon,  dated  Aug  5,  1810,  completed  by 
the  decree  of  St.  Cloud  of  September  12  and  of  Fontaineblenu 
of  October  19,  which  went  the  length  of  ordering  the  seizure 
and  burning  of  all  British  goods  found  in  France,  Germany, 

1  One  of  the  fruits  of  the  preat  blockade  was  the  introduction  of  bcct-root 
sujjar.  In  1810,  the  price  of  sugar  being  very  high,  experiments  wore  made  to 
nin.ke  sugar  from  the  beet-root,  and  the  results  were  encouraging.  In  1811  and 
1812  the  Government  put  at  the  disposal  of  the  Minister  of  Agriculture  100,000 
arpents  of  land  and  l.OOO.OOOf.,  as  well  as  the  exemption  from  nil  taxes  on 
native  sugar,  and  works  for  the  purpose  were  constructed  all  over  the  country. 
But  as  soon  as  the  blockade  was  removed  native  sugar  could  no  longer  com- 
pete with  foreign  sugar,  an<l  most  of  the  works  were  abandoned.  In  1812 
Benjamin  Delessert  found  the  way  of  making  the  grains  of  beet-root  sugar  as 
line  as  those  of  cane  sugar.  And  Vilmorin  was  able  to  make  a  kind  of  white 
beet-root  very  nearly  as  rich  as  the  beet-root  of  Silesia.  In  1829  there  were 
100  sugar  factories,  which  produced  5,000,000  kilos  of  sugar.  In  18:?2  beet 
production  was  double.  In  1837  tliere  were  43(5  sugar  works,  and  now  the  beet- 
root enters  largely  in  the  sugar  industry  all  over  the  Continent. 


Si 


TUE  ORDERS  IN  COUNCIL. 


119 


irulliind,  Italy,  Spain,  and  in  every  place  occupied  by  French 
troops.  Strange  infatuation !  and  how  many  States  took 
part  in  this  mad  act  of  vindictiveness !  The  princes  of  the 
Rhenish  Confederation  hastened  to  execute  it,  some  for  the 
purpose  of  enrichinji;  themselves  by  the  wicked  doed,  some 
out  of  hatred  towards  the  English,  and  some  to  show  their 
devotion  towards  their  master.  From  Carlsruhc  to  Munich, 
from  Cassel  to  Dresden  and  Hamburg,  everywhere,  bonfires 
were  mad(!  of  English  goods.  And  so  exacting  were  the 
French  that  when  Frankfort  exhibited  the  least  hesitation  in 
carrying  out  the  decree  French  troops  were  sent  to  execute 
the  order. 

By  means  such  as  these  the  commerce  of  the  world  was 
greatly  deranged,  if  not  destroyed  altogether;  and  none  suf- 
fered more  from  it  than  England  herself.  Was  it  not  enough 
to  be  ef'i'ectually  shut  out  from  all  commei'cc  with  French 
ports,  that  we  should  have  provoked  the  closing  of  neutral 
ports  also  ?  Was  it  politic,  at  a  time  when  our  relations  with 
the  principal  powers  were  in  a  condition  so  critical,  to  alien- 
ate from  us  all  the  neutral  States  of  Europe  ?  Was  it  wise 
to  indict  so  grievous  an  injury  upon  neutral  States,  as  to 
force  them  to  make  common  cause  with  the  enemy  ?  It  is 
scarcely  possible  to  describe  at  what  peril  the  commerce  of 
the  world  was  carried  on.  The  proceedings  of  the  Court  of 
Admiralty  are  full  of  the  most  romantic  incidents.  An 
Americnm  ship^  with  a  cargo  of  tobacco  was  sent  from  Amer- 
ica to  Vigo,  or  to  a  market  for  sale.  At  Vigo  the  tobacco 
was  sold  imder  contract  to  deliver  it  at  Seville  at  the  master's 
risk,  and  the  vessel  was  going  to  Seville  to  deliver  the  cargo 
when  she  was  captured.  A  British  vessel  ^  was  sei)arated 
from  her  convoy  during  a  storm  and  brought  out  by  a  French 
lugger  which  came  up  and  told  the  master  to  stay  by  her  till 
the  storm  moderated  when  they  would  send  a  boat  on  board. 
The  lugger  continued  alongside  sometimes  ahead  and  some- 
times astern  and  sometimes  to  windward  for  three  or  four 
hours.     But  a  British  frigate  coming  in  sight  gave  chase  to 

1  The  "  Atlas,"  3  Roh.  Rep.,  p.  299. 

2  xiie  «  EJward  and  Mary,"  3  Rob.  Rep.,  p.  305. 


»!r'. 


i 


■\\ 


1/ 


It 


f 


120 


ECONOMIC  HISTORY. 


the  lufiger  and  captured  her,  during  which  time  the  ship 
made  lier  escape,  rejoined  the  convoy  and  came  into  Poole. 
Ships  were  taken  because  they  were  sailing  to  false  destina- 
tions under  false  pajjcra,  false  flags,  false  certificates  of 
ownership,  and  false  bills  of  sale.  They  were  seized  for 
running  the  blockade,  and  for  escaping  from  blockaded  ports. 
They  were  arrested  for  carrying  despatches,  military  men, 
and  contraband  of  war.  In  every  way,  at  every  point  of  the 
ocean,  the  pursuit  was  carried  on,  till  the  seas  were  cleared  of 
merchant  ships,  and  the  highway  of  nations,  the  widest  and 
freest  arena  for  trade,  was  converted  into  an  amphitheatre 
lur  the  display  of  the  wildest  and  worst  excesses  of  human 
cupidity  and  j)as8ions. 

But  a  greater  evil  than  even  this  extreme  derangement  of 
maritime  commerce  was  that  which  flowed  from  the  system 
of  licenses,'  an  evil  which  undermiucd  the  first  principles  of 
commercial  morality.  It  was  forcibly  stated  by  the  Marquis 
of  Lansdowne  that  the  commerce  of  the  country  was  one 
mass  of  simulation  and  dissimulation;  that  our  traders  crept 
along  the  shores  of  the  enemy  in  darkness  and  silence,  wait- 
ing for  an  opportunity  of  carrying  into  effect  the  simulative 
means  by  which  they  sought  to  carry  on  their  business ;  that 
such  a  system  led  to  private  violation  of  morality  and  honor 
of  the  most  alarming  description;  and  that  instead  of  bene- 
fiting our  commerce,  manufactures,  and  resources,  the  orders 
in  council  diminished  our  commerce,  distressed  our  manu- 
factures, and  lessened  our  resources.  Yet  all  these  warnings 
and  expostulations  were  unheeded.  The  national  mind  was 
preoccupied  by  the  one  thought  of  compelling  France  and  her 
military  leader  to  a  complete  submission;  and  no  considera- 
tion of  a  commercial  or  pecuniary  character,  no  regard  to  the 
bearing  of  her  measures  upon  other  countries  were  sufficient 
to  induce  a  reversal  of  this  military  and  naval  policy. 

Upwards  of  fifteen  years  had  elapsed  since  the  first  shot 
was  fired  between  England  and  France  after  the  great  revolu- 

•  The  numbor  of  commercial  licenses  granted  for  imports  and  exports  was 
68  in  1802,  830  in  1803.  1,141  in  1804,  701  in  1805,  1,620  in  1806,  2,G06  in  1807, 
4,910  in  1808,  15,226  in  1809,  18,35G  in  1810,  and  7,002  in  1811 


THE   ORDERS  IN   COUNCIL. 


121 


tion,  ami  yet  tho  two  nations  were  as  intent  as  ever  on 
securing  their  mutual  destruction.  England  had  indeed 
learned  by  this  time  to  make  light  of  all  such  decrees,  and 
she  had  found  by  experience  that  British  goods  found  their 
way  to  the  Continent  in  8{)ito  of  all  vindictive  measures. 
But  the  attitude  of  the  United  States  became  more  and  more 
threatening,  and  the  nations  saw  an  absolute  necessity  for 
revising  the  policy  oi  the  orders  in  council.  For  years  past 
Lord  Temple,  Lord  Castlcreagh,  Mr.  Perceval,  and  Sir  John 
Nichols  had  brought  the  subject  before  the  Mouse,  and  many 
a  long  discussion  had  taken  place  on  the  subject.  In  their 
opinion  this  country  had,  without  any  alleged  provocation 
from  the  United  States  of  America,  interrupted  nearly  the 
whole  of  their  commerce  with  Europe,  and  they  held  that 
such  orders  in  council  were  unjust  and  impolitic,  and  that 
the  issuing  of  them  at  the  time  and  under  the  circumstances 
was  an  act  of  the  utmost  improvidence  and  rashness.  Yet 
the  nation  was  disposed  to  be  guided  by  the  government;  and 
when  Lord  Grenville  moved  resolutions  of  similar  import  in 
1809  ho  met  with  no  better  resi)onse.  When,  however,  the 
United  States,  after  having  passed  the  Non-intercourse  Act, 
proceeded  still  further  in  the  way  of  preparation  for  open 
hostilities,  the  merchants  began  to  speak  their  mind  on  the 
subject;  and  from  London,  Hull,  Bristol,  and  all  the  chief 
ports  ])etitions  came  to  the  legislature  praying  for  the  revoca- 
tion of  the  obnoxious  orders.  The  merchants  of  London 
represented  that  trade  was  in  a  miserable  condition,  chiefly 
from  the  want  of  the  customary  intercourse  with  the  conti- 
nent of  Europe ;  that  em[)loyment  w'as  very  scarce,  and  the 
wages  of  labor  very  low;  that  the  aspect  of  affairs  threatened 
additional  suffering  to  those  then  exj)erienced ;  that  since  all 
the  evils  then  suffered  were  owing  to  the  ccmtinuancc  of  the 
war,  it  was  all-important  to  obtain  if  possible  an  early  res- 
toration of  the  blessings  of  peace;  that  it  was  not  from  any 
dread  of  the  enemy  that  they  made  such  a  request,  but  from 
a  desire  that  no  opportunity  might  be  lost  of  entering  into 
negotiations  for  the  purpose;  that  in  their  opinion  it  was  a 
great  error  to  suppose  that  the  policy  of  the  orders  of  the 


t^ 


•'1 


n 


f  t 
1 1 


til 
i. 


i 


■i 


i  I 


W    I 


1!^' 


•1   I 


I 


122 


ECONOMIC  HISTORY. 


m 


council  could  in  any  way  ho  honoficial  to  trade;  but  that,  on 
tho  contrary,  thoy  regarded  with  extreme  appridicuHioii  its 
oft'cct  on  our  relations  with  tho  United  States  of  America. 
The  meirhants  of  Hull  complained  that  the  system  of  license 
sapped  puhlie  morals;  those  of  Bristol  reijresented  that  they 
suflered  intensely  in  their  general  trade;  and  riots  occurred 
in  Lancashire,  Yorkshire,  and  Clieshiiv. 

On  April  28,  1812,  the  House  of  Commons  agreed  without 
a  division  to  hear  evidence  in  support  of  these  ])etitions;  and 
on  Juiu'  1()  Mr.,  afterwards  Lord,  i^rouuham  moved  "That 
an  humble  address  he  presented  to  his  Royal  liighness  tho 
Prince  Regent,  representing  to  his  Royal  Highness  that  this 
House  has  for  some  time  past  been  engaged  in  an  imiuiry 
into  the  present  depressed  state  of  the  manufactures  and 
commerce  of  the  country,  and  the  effects  of  the  orders  in 
council  issued  by  his  Majesty  in  the  years  1S07  and  ISO!); 
assuring  his  Royal  Highness  that  this  House  will  at  all  times 
suppoit  his  Royal  Higliness  to  the  utmost  of  its  powei's,  in 
maintaining  those  just  maritime  rights  which  have  essen- 
tially contrii)uted  to  the  prosperity  and  honor  of  the  realm; 
but  beseeching  his  Royal  Highness  that  he  would  be  graciously 
pleased  to  recall  or  suspend  the  said  orders,  and  to  adopt  such 
measures  as  may  tend  to  conciliate  neutral  powers  without 
sacrificing  the  right  and  dignity  of  his  Majesty's  crown."  In 
the  most  gra|)hic  manner  Lord  IJrougham  depicted  the  dis- 
tress of  the  country,  showed  how  erroneous  was  the  idea  that 
what  wo  lost  in  the  European  trade  we  gained  in  any  other 
quarti>r,  ami  warned  the  cotmtry  of  the  certainty  of  a  war  with 
America  if  the  orders  were  not  at  once  rescinded.  "  I  know," 
he  said,  "I  shall  be  asked  wliether  I  would  recommend  any 
sacrifice  for  the  mere  purpose  of  conciliating  America.  I  rec- 
ommend no  sacrifico  of  honor  for  that  or  for  any  purpose;  but 
I  will  tell  you  that  I  think  wc  can  well  and  safely  for  our 
honor  afford  to  conciliate  America.  Never  did  we  stand  so 
high  since  wc  were  a  nation  in  point  of  military  character. 
Wc  have  it  in  abundance  and  even  to  spare.  This  unhappy 
and  seemingly  interminable  war,  lavish  as  it  has  been  in 
treasure,  still  more  profuse  of  blood  and  barren  of  real  ad- 


m 
Iff  I 


THE  ORDERS   fN  COUNCIL. 


128 


in 


uich 

out 

In 

is- 
that 

licr 


th 


roc- 
but 
our 

(1  so 

iter. 

ippy 
in 
ad- 


vanta<i;o,  lias  at  Itnist  boon  oquully  lavisli  of  jrlory.  Its  feats 
have  nol  merely  sustauiud  the  warlike  fame  of  the  nation, 
wliieli  would  have  been  much;  they  have  done  what  seemed 
seareely  possible,  —  1  hey  have  jxreatly  exalted  it.  They  have 
covered  our  arms  with  immortal  renown.  Then,  1  say,  use 
this  glory, — use  this  proud  heij^ht  on  whieh  we  now  stand, 
for  the  purpose  of  peace  and  eoneiliation  with  Anu'riea.  Let 
this  and  its  inealeidable  benelits  bt;  tlu!  advantaj^e  which  we 
reap  from  the  war  in  Kurope,  for  the  fame  of  that  war  enables 
us  safely  to  take  it.  And  who,  1  demand,  give  the  most  dis- 
graceful counsels, —  they  who  tell  you  wo  are  in  military  char- 
acter but  of  yesterday,  we  yet  have  a  name  to  win,  wc;  stand 
on  <loubtful  ground,  W(^  dare  not  do  as  we  list  for  fear  of  be- 
ing thought  afraid,  wi*  cannot  without  loss  of  name  stoop  to 
pacify  our  AnuM-ican  kinsmen?  or  1,  who  say  we  are  a  great, 
n  proud,  a  warlike  jjcople ;  we  have  fought  everywhere  and 
conrpiered  wherever  we  have  fought ;  our  character  is  eter- 
nally fixed;  it  stands  too  firm  to  be  shaken,  and  on  the  faith 
of  it  we  may  do  towards  Ameri(;a  safely  for  our  honor  (hat 
which  wc  know  our  interests  require  '!  This  perpetual  jeal- 
ousy of  America !  (Jood  (lod!  I  cannot  with  temper  ask  on 
what  it  rests!  It  drives  me  to  a  jjassion  to  think  of  it! 
Jealousy  of  America!  I  should  as  soon  think  of  being  jeal- 
ous of  the  tradesman  who  supplies  m(!  with  necessaries,  or 
the  client  who  entrusts  his  suits  to  my  patronage.  Jealousy 
of  America!  whose  armies  are  as  yet  at  the  plough,  or  mak- 
ing, since  your  policy  has  willed  it,  so  awkward  (though  im- 
proving) attempts  at  the  loom;  whose  assembled  navies  could 
not  lay  siege  to  an  English  harbor!  Jealousy  of  a  })owor 
which  is  necessarily  ])eaceful  as  well  as  weak,  but  wl.icdi  if 
it  had  all  the  ambition  of  France  and  her  armies  to  bade  it, 
and  all  the  navy  of  England  to  boot,— nay,  had  it  the  lust  of 
conquest  which  marks  your  enemies,  and  your  own  army  as 
well  as  navy  to  gratify  it,  —  is  j)laced  at  so  vast  a  distance  as 
to  be  perfectly  harmless!  And  this  is  the  nation  of  whieh 
for  our  honor's  sake  we  are  desired  to  cherish  a  perpetual 
jealousy  for  the  ruin  of  our  best  interests!  I  trust,  sir,  that 
no  such  phantom  of  the  brain  will  scare  us  from  the  path  of 


I 


124 


ECONOMIC  HISTORY. 


I;i 


A. 

'it- 

V  \ 


R:! 


^f 


»     i': 


our  duty.  The  advice  which  I  tender  is  not  the  same  which 
has  at  all  times  been  offered  to  this  country.  There  is  one 
memorable  era  in  our  history  when  other  uses  were  made  of 
our  triumphs  from  those  which  I  recommend.  By  the  treaty 
of  Utrecht,  which  the  reprobation  of  ages  has  left  inade- 
quately censured,  we  Avere  content  to  obtain,  as  the  whole 
price  of  Ramillies  and  Blenheim,  an  additional  share  of  the 
accursed  slave  trade.  I  give  you  other  counsels.  I  should 
have  you  employ  the  glory  which  you  have  won  at  Talavera 
and  Corunna  in  restoring  your  commerce  to  its  lawful,  open, 
honest  course,  and  rescue  it  from  the  mean  and  hateful 
channels  in  Asdiich  it  has  latclv  been  confined.  And  if 
any  thoughtless  boaster  in  America  or  elsewhere  should 
vaunt  that  you  have  yielded  through  fear,  I  would  not  bid 
him  wait  until  some  new  achievement  of  our  arms  put  him 
to  silence,  but  1  would  counsel  you  in  silence  to  disregard 
him." 

The  effect  of  such  an  appeal  was  fatal  to  the  whole  system. 
The  government  saw  that  resistance  was  no  longer  possilile, 
and  on  April  21  the  Prince  Regent  made  a  declaration  that 
the  orders  in  council  would  be  revoked  as  soon  as  the  Berlin 
and  J^Iilan  decrees  should  bo  repealed.  But  it  was  too  late. 
America  had  by  this  time  ceased  to  maintain  a  neutral  atti- 
tude. And  having  made  a  secret  treaty  with  Napoleon,  she 
issued  an  embargo  on  all  British  vessels  in  American  ports, 
declared  war  against  England,  and  proceeded  to  make  an  in- 
effectual attack  Upon  Canada.  The  political  condition  of 
Europe,  however,  at  this  stage  happily  assumed  a  brighter 
asi)cct.  The  long-desired  peace  began  to  dawn  on  the  hori- 
zon, and  in  rapid  succession  tlie  news  came  of  the  battle  of 
Leipzig,  the  entry  of  the  Allies  into  Paris,  and  the  abdication 
of  Bonaparte.  Negotiations  then  commenced  in  earnest,  and 
they  issued  in  the  treaty  of  peace  and  Congress  of  Vienna, 
which  once  more  restored  order  and  symmetry  in  the  politi- 
cal organization  of  Europe.^     On  Dec.  24,  1814,  a  treaty  of 


iU 


1  The  total  cost  of  the  war  with  France,  from  1703  to  1815  (the  war  expen- 
diture continued  till  1817),  was  £831,446,449.  The  national  debt,  which,  in 
1703,  amounted  to  £247,874,434,  rose  in  1816  to  £861,039,049. 


ft  I- 


THE  ORDERS  IN   COUNCIL. 


126 


peace  was  signed  between  the  United  Kingdom  and  the 
United  States.  On  June  0,  1815,  Mhe  principal  act  of  the 
Congress  of  Vienna  was  signed,  which  established  the  future 
political  relations  of  the  European  States,  and  laid  down  the 
regulations  for  the  free  navigation  of  rivers.  And  on  July 
27  of  the  same  year  a  Treaty  of  Conmiercc  was  concluded 
between  Great  Britain  and  the  United  States  of  America. 

1  The  treaties  of  Vienna  had  to  deal  with  the  financial  as  well  as  with  the 
political  condition  of  States.  By  agreement  dated  August  10,  1815,  France  be- 
came boinid  to  pay  185,840,130f.  to  the  Allied  Powers  for  the  maintenance  of 
the  1,135,000  men,  tiie  army  of  occupation.  And  by  the  treaty  of  November 
15,  France  undertook  to  pay  700,000,000f.  to  tlie  Allied  Powers  as  war  contribu- 
tion, to  pay  all  legitimate  debts,  and  also  the  expense  of  occupation  uf  150,000 
men  for  five  years.  Numerous  claims  were,  moreover,  made  by  the  Banks  of 
Hamburg,  Amsterdam,  Genoa,  the  Swiss  bankers,  and  many  merchants  for 
losses  and  destruction  of  their  property,  amounting  in  all  to  2,700,000,000f.,  and 
all  these  claims  were  settled  by  means  of  loans  contracted  with  the  banking 
houses  of  Earing  and  Hope. 


I 


\'    il 


*  ^1 


m 


126 


ECONOMIC  HISTORY. 


VI. 


'r 


THE  FINANCES  OP  ENCxLAND,  1793-1815. 


From  Pokteu's  Pkogkess  of  the  Nation,^  Section  IV. 


CHAPTER  I. 


If 

11:      I 


1    \ 


TN  order  to  give  an  intelligible  account  of  the  financial 
-*•  state  of  the  kingdom  at  the  beginning  of  the  present 
century,  it  is  necessary  to  explain  briefly  the  system  which 
had  been  brought  into  operation  by  Mr.  I'itt  during  the  pre- 
ceding three  years. 

In  November,  1797,  that  minister  had  recourse  to  what  he 
was  pleased  to  call  "a  perfectly  new  and  solid  system  of 
finance."  The  public  expenditure  of  that  year  amounted  to 
twenty-five  and  a  half  milliims,  of  which  sum  only  six  and  a 
half  millions  were  provided  for  by  existing  unmortgaged 
taxes,  leaving  nineteen  millions  to  be  raised  by  extraordinary 
means.  In  the  then  condition  of  the  money  market  it  was 
felt  to  be  impossible  to  borrow  such  an  amount  in  the  ordi- 
nary manner,  that  is,  ])roviding  by  new  taxes  for  the  pay- 
ment of  only  the  i)ermanent  annual  burden  oeeasi'>ned  l»y 
the  increased  debt;  and  a  new  impost,  calculated  to  produce 
seven  millions,  was  sanctioned  by  parliament,  which  impost 
was  to  be  continued  until  it  should  in  conjunction  with  the 
produce  of  tlie  sinking-fund,  re})ay  the  twelve  millions  that 
would  be  still  delicient.  Tliis  new  system  of  finance  might 
have  been  entitled  to  tlie  character  given  of  it  by  Mr.  Pitt,  if 
it  had  not  l)een  pn)bal)le.  —  nay,  certain,  that  in  the  follow- 
ing years  an  cfjual  expenditure  must  be  met  by  similar  means, 
until  the  seven  millions  would  j)rove  inade(]uate  even  for  the 
payment  of  the  annual  interest  of  the  sums  for  which  the  tax 

'  London  :  John  Murray,  1851. 


FINANCES  OF   ENGLAND. 


127 


rax 


was  imposed,  when  it  would  become  part  of  the  permanent 
burdens  of  the  country.  This  new  impost,  to  which  the 
name  of  "triple  assessment"  was  given,  was  in  fact  an  addi- 
tion made  to  the  assessed  taxes,  "  in  a  triplicate  ])roportion 
to  their  itrevious  amount, —  limited,  however,  to  the  tenth  of 
each  person's  income." 

The  adoption  of  this  or  some  similar  plan  of  financial 
arrangement  was  hardly  a  matter  of  choice  with  the  minister 
by  whom  the  funding  system,  as  ordinarily  practised,  could 
not  have  been  any  further  pursued  at  that  time.  Unfortu- 
nately for  the  success  of  the  principle  which  it  was  thus 
sought  to  establish,  the  mode  in  which  it  was  proi)osed  to 
raise  the  seven  millions  of  additional  revenue  was  highly 
uiip()i»ular;  and  indeed  it  has  always  excited  dissatisfaction 
on  the  part  of  the  public  to  be  called  on  for  the  payment  of 
any  tax  from  which  they  have  not  the  power  to  protect  them- 
selves by  a])staining  from  the  use  of  the  taxed  commodity. 
It  is  this  consideration  which  has  always  made  our  finance 
ministers  prefer  indirect  to  direct  taxaticm,  and  which  led, 
during  the  ))rogress  of  a  long  and  expensive  war,  to  the  im- 
position of  duties  that  weighed  with  destructive  force  upon 
the  springs  of  industry.  The  financial  difficulties  by  which 
the  government  was  then  embarrassed  may  be  known  from  the 
fact  that  a  loan  of  three  millions  was  raised  in  April,  1798, 
at  the  rate  of  £200  three  per  cent  stock,  and  5.s'.  long  an- 
nuity for  each  £100  borrowed,  being  at  the  rate  of  six  and  a 
quarter  per  cent,  and  that  the  "triple  assessment,"  which 
was  calculated  to  produce  seven  millions  yielded  no  more 
than  four  and  a  half  millions.  In  the  following  December 
the  triple  assessment  was  repealed,  and  in  lieu  of  it  an  in- 
come-tax was  imposed  at  the  rate  of  ten  percent  upon  all 
incomes  amounting  to  £200  and  ujjwards,  with  diminishing 
rates  upon  smaller  incomes,  down  to  sixty  jkjiukIs  i)er  anuuni, 
l)elow  which  rate  the  tax  was  not  to  apply.  This  tax  was 
estimated  to  produce  ten  millions:  it  was  called  a  war  tax  ; 
but  when  the  minister  proceeded  to  mortgage  its  produce  to 
defray  the  interest  of  loans  to  a  large  amount  such  a  name 
appeared  to  be  little  better  than  a  delusion.     Like  the  triple 


■^^ 


128 


ECONOMIC  Ills  roil  Y. 


ill 
W 


1  1' 


I 


assessment,  the  produce  of  the  income-tax  fell  greatly  short 
of  its  estimated  amount  and  yielded  no  more  than  seven 
millions,  a  lai'gc  i)art  of  which  was  quickly  absorbed  to  de- 
fray the  interest  of  loans  for  which  it  was  successively 
pledged.  In  1801,  after  deducting  the  sums  thus  chargeable 
on  it,  this  tax  produced  only  four  millions  towards  the  na- 
tional expenditure.  In  proposing  a  loan  of  twenty-five  and 
a  half  millions  for  the  service  of  that  year,  it  was  considered 
inexpedient  to  mortgage  the  income-tax  any  further,  and 
new  taxes  were  imposed  estimated  to  yield  j£  1,800, 000  per 
annum.  In  March,  1802,  jjcace  was  made  with  France,  and 
in  the  same  month  notice  was  given  by  the  Chancellor  of  the 
Exchequer,  Mr.  Addington,  of  his  intention  to  repeal  the 
income-tax,  which  was  felt  to  be  highly  oppressive,  and  had 
become  more  and  more  odious  to  the  i)eoi)le.  In  eifecting 
this  repeal,  and  at  the  same  time  to  keep  faith  with  the  pub- 
lic creditors  to  whom  its  ])roduce  had  been  mortgaged  to  the 
extent  of  fifty-six  and  a  half  millions  of  three  per  cent  stock, 
additional  taxes  were  im])osed  ui)on  beer,  malt,  and  hops, 
and  a  considerable  increase  was  made  to  the  assessed  taxes ; 
besides  which  an  additiijn  under  the  name  of  a  modification 
was  made  to  the  tax  on  imports  and  exports  previously  known 
under  the  name  of  the  convoy  duty. 

At  this  time  the  aggregate  amount  of  permanent  taxes 
was  thirty-eight  and  a  half  millions,  exactly  double  what  it 
had  been  at  the  breaking  out  of  the  war  in  1793.  During 
those  nine  years  taxes  to  the  amount  of  £280,000,000  ex- 
clusive of  the  cost  of  collecti(m  had  been  levied  from  the  peo- 
^)le ;  and  a  few  words  arc  necessary  in  order  to  account  for  the 
seeming  contradiction  implied  in  the  fact  that,  notwithstand- 
ing this  ruinous  rate  of  expenditure,  many  of  the  great  inter- 
ests throughout  the  country  wore  the  outward  appearance  of 
prosperity.  A  nation  engaged  in  an  expensive  war,  which 
calls  for  the  systematic  expenditure  of  large  sums  beyond  its 
income  may  be  likened  to  an  individual  spendthrift  during 
his  career  of  riot  and  extravagance;  all  about  him  wears 
the  aspect  of  plenty  and  prosperity,  and  this  appearance  will 
continue  until  his  means  begin  to  fail,  and  those  who  have 


FINANCES   OF  ENGLAND. 


129 


fattened  upon  his  profusion  are  at  length  sent  away  empty. 
The  enormous  expenditure  of  the  government  joined  to  the 
state  of  the  currency  (as  already  explained)  necessarily  caused 
a  general  and  great  rise  of  prices;  as  regarded  agriculturol 
produce,  this  effect  was  exaggerated  by  tiie  ungcnial  nature  of 
the  seasons.  Rents  had  risen  throughout  the  country  in  a  far 
greater  degree  than  the  necessary  expenditure  of  the  land- 
owners, who  thence  found  their  situations  imi)roved,  notwith- 
standing the  additional  load  of  taxation.  The  great  number 
of  contractors  and  other  persons  dealing  witli  the  government 
had  derived  a  positive  benefit  from  the  public  expenditure, 
and  being  chiefly  resident  at  the  seat  of  government,  they 
were  enabled  greatly  to  influence  the  tone  of  public  opinion. 
The  greater  command  of  money  thus  given  to  considerable 
classes  occasioned  an  increacod  demand  for  luxuries  of  for- 
eign and  domestic  pi'oduction,  from  which  the  merchants  and 
dealers  derived  advantage.  There  were  besides  other  classes 
of  persons  who  profited  from  the  war  exi>enditure.  These 
were  the  producers  of  manufactured  goods  and  those  who 
dealt  in  them,  and  who  found  their  dealings  greatly  in- 
creased hy  moans  of  the  foreign  expenditure  of  the  govern- 
ment in  subsidies  and  expeditions,  the  means  for  which  were 
furnished  through  those  dealings;  the  manufacturers  were  at 
the  same  time  l)Oginning  to  reap  the  advantages  that  have 
since  been  experienced  in  a  more  considerable  degree  from 
the  series  of  inventions  begun  by  Ilargrcaves  and  Arkwright, 
and  which  acted  in  some  degree  as  palliatives  to  the  evil 
effects  of  the  government  profusion. 

As  in  the  case  of  the  sjtendthrift,  while  all  these  causes 
were  in  operation  there  was  an  a])pearance  of  prosperity,  and 
those  who  were  profiting  from  this  stiatc  of  things  were  anx- 
ious to  keep  up  the  delusion.  That  it  was  no  more  than  delu- 
sion will  be  at  once  apparent  to  all  who  examine  below  the 
surface,  and  who  inquire  as  to  the  condition  of  poverty  and 
wretchedness  into  which  the  groat  mass  of  the  jjooplo  wore 
then  plunged.  In  some  few  cases  there  had  been  an  advance 
of  wages;  but  this  occurred  only  to  skilled  artisans,  and 
oven  with  them  the  rise  was  wholly  incommensurate  with  the 

9     '. 


m 


.!  i 


I 


;  Hi 
>   Ml 


M      t" 


^M 


180 


ECONOMIC  HISTORY. 


I 


increased  cost  of  all  the  necessaries  of  life.  The  mere  laborer 
—  he  who  had  nothing;  to  bring  to  market  but  his  limbs  and 
sinews —  did  not  participate  in  this  partial  compensation 
for  high  prices,  but  was  in  most  cases  an  eager  competitor 
for  employment  at  the  same  or  nearly  the  same  wages  as  had 
been  given  before  the  war.  Nor  could  it  well  be  otherwise, 
since  the  demand  for  labor  can  only  increase  with  the  in- 
crease of  the  caj)ital  destined  for  the  payment  of  wages ;  and 
we  have  seen  that  capital,  so  far  from  being  suffered  to 
accumulate,  was  dissipated  by  the  government  expenditure 
more  rapidly  than  it  could  be  accumulated  by  individuals. 
In  London  and  its  vicinity  the  rates  of  wages  are  necessarily 
higher  because  of  Hio  g.-cater  expense  of  living  than  in  coun- 
try districts;  ail':  it  n  "^ss'rted  from  personal  knowledge  of 
the  fact  that  at  the  lu  ;■  [uestion  there  was  a  superabund- 
ant supply  of  laborers  constantly  comi)eting  for  employment 
at  the  large  govcnuarnt  establisliments,  where  the  weekly 
wages  did  not  exceed  lo.  ,  wluio  iho  price  of  the  (piartern 
loaf  was  Is.  10c?.,  and  the  other  n.  essary  outgoings  of  a 
laborer's  family  were  nearly  as  high  in  proportion.  If  we 
contrast  the  weekly  wages  at  the  two  periods  of  1790  and 
1800,  of  husbandry  laborers  and  of  skilled  artisans,  measur- 
ing them  both  by  the  quantity  of  wheat  which  they  could 
command,  it  will  be  seen  that  the  former  could  in  1790  pur- 
chase eighty-two  pints  of  wheat,  and  in  1800  could  procure 
no  more  than  fifty-three  pints,  while  the  skilled  artisau,  who 
in  1790  could  buy  one  hundred  and  sixty  nine  pints,  could 
f)rocurc  in  1800  only  eighty-three  pints.  To  talk  of  the  pros- 
perous state  of  the  country  under  such  a  condition  of  things 
involves  a  palpable  contradiction.  It  would  be  more  correct 
to  liken  the  situation  of  the  community  to  that  of  the  inhabi- 
tants of  a  town  subjected  to  a  general  conflagration,  in  which 
some  became  suddenly  enriched  by  carrying  off  the  valuables, 
while  the  mass  were  involved  in  ruin  and  dostitiitiou. 

It  may  be  objected  to  the  view  here  taken,  but  which  is 
founded  upon  facts  that  hardly  admit  of  controversy,  that 
had  the  condition  of  the  country  been  such  as  is  represented, 
we  must  have  sunk  under  the  greater  efforts  we  were  so  soon 


11 


FINANCES   OF  ENGLAND. 


131 


after  ciillod  on  to  sustiiin ;  ami  there  is  every  reason  to  be- 
lieve that  but  for  the  invention  of  the  spinning- jenny  and  the 
improvements  in  the  steam-engine,  whieh  liave  produced  such 
almost  magical  effects  upon  the  productive  energies  of  tliis 
kingdom,  it  would  have  been  impossible  to  luivc  withstood 
the  combination  with  which  single-handed  wc  were  called 
upon  to  contend.  The  manner  and  degree  in  which  these 
powerful  agents  have  enabled  us  to  withstand  and  to  triumph 
over  difliculties  unparalleled  in  the  history  of  the  world  have 
been  shown  in  a  preceding  section  of  this  inquiry. 


CIIAPTEK  II. 


lirh  is 
,  that 
nited, 


The  public  expenditure  of  England  during  the  war  which 
was  begun  in  1793  and  continued  (with  short  intermissions 
in  1801  and  1814)  until  the  final  overthrow  of  Napoleon  in 
1815,  was  conducted  throughout  upon  a  truly  gigantic  scale. 
In  1792,  the  last  year  of  peace,  the  entire  public  expenditure 
of  the  kingdom  was  £19,8r)9,123,  which  sum  included 
ce9,7G7,333  interest  upcm  the  public  debt.  In  1814  the  cur- 
rent expenditure  amounted  to  £70,780,805,  and  the  interest 
ui)on  the  debt  to  £30,051,365  making  an  aggregate  sum  of 
£100,832,2(30  paid  out  of  the  public  exchequer  for  the  dis- 
bursements of  that  one  year.  This  is  the  largest  annual 
outlay  over  made;  that  of  the  previous  year  was  within  om; 
million  of  the  same  amount. 

It  is  hardly  possible  to  conceive  that  the  public  expendi- 
ture could  have  been  long  continued  upon  this  scale  of  mag- 
nitude. The  state  of  exh<austion  under  which  the  country 
was  made  to  suffer,  during  the  first  few  years  of  the  peace 
that  followed,  sulhciently  attests  the  truth  of  this  oi)inion. 
The  financial  efforts  of  the  government  had  been  made  for 
several  preceding  years  with  a  degree  of  lavish  profusion 
that  was  continually  augmented  until  it  reached  the  height 
above  mentioned;  the  expenditure,  including  interest  ujjon 
the  debt,  during  the  ten  years  from  1800  to  1815  inclusive, 
averaged  £84,007,761  per  annum,   sums  which,   until  the 


'^U 


♦r 


1 1 

a,; 


1" 


11?: 


k 

it 


(:: 


I 


ii 


'I  I  I 


132 


ECONOMIC  HISTORY. 


years  in  which  they  wore  actually  expended  it  would  have 
been  considered  wholly  chimerical  to  expect  to  raise.  The 
experience  of  that  period  has  shown  liow  inij)ossiblc  a  thing 
it  is  to  judge  correctly  from  the  ))ast  as  to  the  growing  re- 
sources of  our  country,  or  it  might  be  conlidently  aflirmed 
that  during  the  concluding  y(!ars  of  this  scries  we  had 
assuredly  reached  the  limit  of  possibilit}'.  Without  that 
experience  for  their  guidance,  our  ancestors,  in  former  but 
not  very  remote  times,  gave  way  to  gloomy  forebodings  as  to 
their  future  prospects,  at  Avliich  we  cannot  but  smile  when 
thinking  of  the  c(miparatively  pygmy  efforts  wliich  called 
them  forth.  Some  of  those  forebodings  have  been  recorded 
by  Sir  John  Sinclair  in  his  work  on  the  public  revenue  of 
this  kingdom.  A  few  passages  \i\)on  the  subject  taken  from 
that  work,  and  with  the  dates  at  which  they  were  written, 
may  not  be  without  interest  to  the  reader  at  the  present 
moment. 

IT.'JC.  "Tho,  vast  load  of  debt  under  wlii('li  the  nation  still 
groiins  IS  tlie  true  source  of  all  those  calamities  and  gloomy  prospects 
(if  wiiicli  w(!  have  so  much  reason  to  conn)lain.  To  this  has  been 
owing  that  multii)licity  of  burdensome  taxes  which  have  more  than 
doubled  the  jjrice  of  the  common  necessaries  of  life  within  a  few 
years  past,  and  tlierehy  distressed  tlie  i)oor  laborer  and  maiuifao- 
turer,  disabled  the  farmer  to  pay  his  rent,  and  put  even  gentlemen 
of  plentiful  estates  under  the  greatest  diiiiculties  to  make  a  toler- 
able provision  for  their  families."  * 


At  the  time  this  gloomy  picture  was  drawn  the  public  debt 
did  not  exceed  .£50,000,000,  and  the  annual  charge  on  that 
account  was  somewhat  under  £2,000,000,  being  considerably 
below  the  sums  added  to  the  public  burdens  in  the  single 
year  1814. 

1749.  "Our  parliamentary  aids,  from  the  year  1740,  exclu- 
sively, to  the  year  1748,  inclusively,  amount  to  .^5.5, .522, 159  IDs. 
od.,  a  sum  th.at  will  appear  incredible  to  future  generations,  aiul  is 
so  almost  to  the  present.  Till  we  have  j)aid  a  good  part  of  our 
debt,   and   restored  our  country   in  some  measure  to  her  former 

1  The  Craftsman,  No.  502, 14th  February,  1736. 


-w 


■■4 

"•S> 


FINANCES  OF  ENGL  AX  D. 


188 


y)\]c  debt 
on  that 
lulorably 
single 

exclu- 
,159  Ifis. 
lis,  and  is 
(•t  of  our 
|r  former 


wi'ulth  and  power,  it  will  be  ditticult  to  maintain  the  dignit}'  of 
Grwit  liritain,  to  make  her  resiH'ctcd  abroad,  and  secure  from 
injuries  or  even  affronts  on  the  part  of  her  neiglibors."  * 

The  debt,  to  the  effects  of  whicli  so  much  evil  is  hero  at- 
triijuted,  was  still  under  £80,000,000,  and  the  annual  inter- 
est scarcely  more  than  il  3, 000, 000. 

ITW).  "  It  lias  been  a  generally  received  notion  among  political 
arithmeticians,  that  we  may  increase  our  debt  to  Jfc;lO(),000,()()0, 
but  they  acknowledge  that  it  must  then  cease,  by  the  debtor 
becoming  bankrupt."* 

la  the  few  years  that  preceded  the  publication  of  Mr. 
Ilannay's  letters  the  debt  had  been  somewhat  diminished, 
so  that  it  amounted  to  about  iJ  75, 000, 000,  and  the  annual 
charge  on  the  country  to  X  2, 400, 000. 

1701.  "The  first  instance  of  a  debt  contracted  upon  parliamen- 
tary security  occurs  in  the  reign  of  Henry  VI.  Tlie  commence- 
ment of  this  pernicious  practice  deserves  to  bo  noted,  — a  practice 
the  more  likely  to  become  pernicious  the  more  a  nation  advances  in 
opulence  and  credit.  Tlio  ruinous  effects  of  it  are  now  liecome 
apparent,   and  tlireaten  tlie  very  existence  of  tlie  nation."^ 

The  public  burdens  had  by  this  time  so  far  exceeded  the 
possible  limit  assigned  by  Mr.  IJannay,  that  the  debt 
amounted  to  nearly  =£150,000,000,  and  the  annual  interest 
to  =£4,800,000.  The  amoimt  was  simiewhat  reduced  between 
that  period  and  the  breaking  out  of  the  American  war,  when 
a  succession  of  loans  again  became  necessary.  On  winding 
uj)  the  accounts  of  that  contest,  the  del)t  amounted  to 
X 21)8,000, 000,  and  the  annual  charge  to  i:9,500,000.  On 
the  6th  of  January,  1793,  just  before  the  beginning  of  the 
war  of  the  French  Revolution,  the  debt  continued  nearly  the 
same  as  at  the  beginning  of  the  peace  (the  exact  amount  of 
funded  and  unfunded  debt,  including  the  value  of  terminable 

'  Some  Reflections  on  the  Present  State  of  the  Nation,  by  Henry  St.  John, 
Lord  Holingbrolcc. 

^  Letters  by  Samuel  Ilannay,  Esq. 

'  Hume's  History  of  England,  8vo  edition,  1778,  vol.  iii.  p.  215. 


If 


-H 


% 


4 


.'if 

^  I 


134 


ECONOMIC  ill  STORY. 


"^ 


ABaTKACT    OF    PUBLIC    INl^OMK    AND    KXI'RNDITIJUK    IN    THK   UNITED   KINGDOM 
IN   KACII    VKAK,   FROM   17'J2  TU    1«4'J 


1  1 

p.^ 

1     ; 

1. 
1    1 

<}«■ 

1 

«1 . 

■' 

1    1  1 

l|       :    1 

li.. 

i 


i 


\\  I 


r.' 


1792  .. 
17!i3  .. 

1704  .. 

1705  .. 
17111! 
17!»7... 
1708... 
1700  . 
IH(II)  .. 
llOl... 
1st  12,.. 

mw .. 

1*14  . 
l.S(»5 
l«mi  .. 
1807... 
18US  .. 
ISOO  . 
1810.. 
1811... 
1812  .. 
181H 
1814... 
181.5  .. 
181(i... 
1817  . 
1S18  . 
1810.. 

1820  .. 

1821  . 
m22 
1823 

1824  ., 

1825  . 
182»>  . 
1827  .. 
1^28  . . 
1820  .. 
1.8;5J  .. 
1831  . 
1>*;32 
KW    . 

is;u .. 
\^v, .. 

183)... 

1837  .. 

1838  .. 
IWW  .. 
1840... 
1841  .. 
1842.. 
1843  .. 
1S44  .. 
1845  .. 
1-<4I!  .. 

1847  .. 

1848  . 
1849.. 


YKA113 


I.XCOUI. 


cW  £.d 


w.  o      2 


^.^l. 


51 
■  a 


3  9  -•  --    -  • 


£19,258,814 
10,845,705 
20,103,074 
10,88;i,520 
21,454,728 
23,120,040 
31,<l!J5,3tW 
3('.,li02,44 1 
34,I45.,584 
34,113,141) 
30,308,140 
38,000,30i 
40,170,402 
50,807,700 
05,700,080 
50,;«9,321 
02,908,101 
t>.3,719,400 
07,144,512 
05,173,.'-)45 
05,O37..8j-)0 
(i8,74K,303 
71.134,503 
72,210,512 
02,204,540 
52,055.913 
53,747,7051 
52,t)48,847 
64,282,9.58 
.5.5,8.34.192' 
55  WW,i«0) 
57,(!72.0t«! 
60,302,4031 
57,273.8«ol 
54,804,989j 
54,0325181 
5,5,187,142' 
5O,780,(iS2! 
5tl,O5i),01«, 
40,424,440 
40,O8S,7.5i') 
40,271, .320; 
40.42J-..203 
45,893,30a| 
48,591,180, 
4l),475,194i 
47,a'i3,400| 
47,844.899, 
47,5li7,.')05 
48,n84,3tai: 
40,0<i5,031l 
52,682,817' 
54.(KI3,7.54' 
5.'1.0li0.a54l 
r>.'i.70O,l.S8l 
61,540.2'>5i 
53.:!X8,T17i 
52,931,7401 


4,877,9.-)(' 

0,0>I8,3S0 
3o,4i:4,>'31 
22.244,0S2 
30,3."i.l,SV3 
10,858  ,.503 
21,714,803 
23  ,o:  Jo  ,529 
27,3115.271 
14.o;J8,2r)4 

8,7.52.701 
14,570. 7t'>3 
10  84O,.801 
13.(tt-|,314 
10,432,031 
12.005,"44 
12,208,3' 

7,792.444 
19,143,.ra 
24,7!K-l,007 
30.040,282 
34,.50:),0(i3 
2U, 241,8117 
514,059 


333,989 


853,0,3' 
1,014,359 


7,470.353 

I. .503,045 

374,568; 


§1 


H 


EXPKIIDtTOai 


^  OS 

lt  = 


li 


3 


"a.     o'" 

_  fc»  o     ' 

q  4.  4.  5  i^ 


£19,258,814 
24,723  001  I 
27,101,403 
50,318,351 
43,000,710  I 
53,lSi,S13  I 
47,K03,sr,0  ! 
57,317,:)07  ; 
57,170,113  ' 
(1,418,417 
51,lK«i,403 
47,302,1.53  ! 
tlO,747,2i-)5  I 
07,747,507  1 
71,831,4:10 
00.772,255 
75,O03,2;J5 
(0.017,770 
74,930,080  1 
84,317,498  \ 
89,828,547 

los,307.(H5  ! 

10,5,008,1(10 
!I2,4.52,319 
02,778,(;05  , 
.52.1155,1113 
53,747.705 
52.048,847 
54.282,05X 
fi,5,834,l!t2  ' 
55,(;(K),0.5O  ' 
57,(i72,:iOO  ' 
fi9..'iii2,403  I 
67,273.809  i 
54,H94,0.-<9 
54,0:i2,5l8 
55, 1.87,142 1 1 
50,78ti,()S2  I 
5O,O5(i,01(i,i 
40,424,440 
47.322,744  [ 
40,27  l,32(i 
40,42-i,2i3  i 
45,803.310 
48.591,18(1 
40,475,104 
47,3;W,4i»i 
47,844,809 
47 ,507  ,.505 
48,937,.307 
48,r)8(),(i2(! 
52„'-,82,817 
54,(KI3,7,54 
53.0(50.354 
5:1700,138 
50,022.017 
54.0.^2,002 
63,320,317 


£9,707 ,ai3  £2,421,081 

9.437,802  ..; 

0,800,004' 

10,810,728, 

11,841,204   

14,270,018    

17,585.5181 

17,22(1,083, 

17.381,.50l| 

10,945,0241  

19.8(V.,588| 

20,099,8041 

20,726,772 

22,141,426   

2;j,UKi,0(Ki 

2;i,3i '.2,0.85 

2;J,15H,982 

24  213.807' 

24,240,940 

24,077,916 

26.540,508 

28.o;}0,239 

30,051, ;M) 

31,57ti,074 

32,038751 

31,430  245 

30,8.80,244 

30,807,249 

31,1.57,846 

31,9.55,304 

20,921,493 

29,215,005' 

29,Ol>0,3riOi 

28,ll(;(),287: 

28.076.957 

28,239,847 

28,095,500' 

29,li')5,lil2i 

29,118,868: 

28,341,4161 

28,3'23,75l! 

28.,522,,507' 

28,504,i'96 

28,514,010 

29,243.508. 

29.480.5711 

20  200.2;i8l 

29.4.54,002' 

29.381,7181 

29.450.145 

29,428,120| 

29,200,100! 

,30.405,4591 

28,2,53,872 

28,(177,087! 

2H,141,.531I. 

2s.5i!;!,517 

28,323  961 


K   3 

c  -3 
C   13 


1,826,814 

l,(i24.(;06 

3.103.1;*) 

1,918,(119 
4.104.457 
2,!h;2,.504 
5,2(il.72j'-) 
6,46i),.550 
»,!ifHl,725 
1,196,531 
2,023,O'i8 
4,007 ,9(;5 
2,7f«),(X13, 
l,93i5,4651 
2,673,8581 

5,696' 
l,023,784i 
1,776,378 
1.270.O.5ol 
1.690,727! 
1,985,886! 

7,496: 


8,016; 


8,741 
1,663,361 
4,143,891 


21,074 


£7,670,10!) 
14,769,208 
17,.851,213 
37,003,149 
30,im,li87 
80,469,993 
83.541,727 
3^,403,421 
39,430.700 
41,iJh3,.555 
29,(;93,(il9 
28,298,366 
3H.04!i,436 
45,027,89: 
45,941,206 
44,2j')0,;i57 
40,984,105 
52,;i5'.i,14  ■ 
62,(il  1,002 
68,757,308 
0;j,210,8IO 
77,913,488 
70,780,895 
00.704,100 
32,2ii  1,020 
22.01M  179 
20,843,728 
21,430,130 
21,3S|,3,S2 
21,o7o,'*25 
20,H:ii;,567 
21,74ii,ll0 
23,708.262 
23..559,741 
25,80S,5S5 
25,.5IW,440 
21,407,07(1 
19,910.,522 
18,024,085 
18.781,882 
18,0,50,245 
16.235.73)') 
lt),397,0(J5 
15,884,649 
17,2,58,871 
17,041,383 
1.8,418  449 
19,903,0'iO 
10,779,818 
20,7.3i'),.'.84 
21,517.049 
21.870,353 
20,1,52,180 
20,988,840 
22,8ti6.843 
26,,S01,416 
25,021. (ilO 
22,629,061 


s.g 


g'2 


S  "A 


£19,869,123 
24,107,070 
27,742.117 
4S,414,177 
42,175,201 
60,740,009 
61,127,245 
65,(i2.|,404 
6(1,821,207 
01,3'J9,17» 
49,549,207 
48,U!)8,2;30 
59,376,208 
«7,10!1,318 
t«,94 1,211 
07,613,042 
73,143,087 
70,.500,(113 
70,865,548 
83,7ii''>,223 
88,757,324 
10.-..94:i,727 
10(i,832,2(i() 
02,2MI,180 
65,160,771 
65.281.2:18 
53,348  578 
5ri,4(i0,609 
54.457.247 
57,l;J0,686 
63,710.624 
66  22;t.740 
59,2;il,16l 
61.5i:o,763 
55.081.1173 
55,8  3,;i21 
54,171.141 
61,835,137 
40.(178,108 
49.797,156 
40,370,092 
46,782,026 
46,078,079 
45,009.309 
48.01(3,196 
49  110,839 
47,686,1.83 
49,;jf,7,691 
4!l,100,552 
50,185,729 
6(1.945,109 
51,148,2/')4 
62,21 1,(M'9 
69.3a(>,603 
60.94:1.8,30 
64,602,947 
64,18.5,136 
60,874,696 


i 


FINANCES   OF  ENGLAND. 


135 


Pa 


o  '< 


Hi      ,_?  r^  -  —  _.  —  — 


r^  CO  rt  Wf-s 


&«  s 


s.a 


In 
§  i  a 


a  I 


9    S 


CJ  (X  ^  rr  5  5  5-  3  -2  5  A  i  ^  ::  '-i  :m  a  ■+  ^5  "JJ  5  -a*  -i*  ^■"■■:  5 

M'rf-'«?^?i'»        Sew  rH        r-(e4'-'P-iiOOfiCaDC0r-t-t 


crt 


>    ■«    -co    :»-M    Vt^^tl 

5      i-t      eo"     p-Tf<      Ci^wcrj" 


I    8 


I  -  r  5  3 


«isiliii  ill 


u 


ji  ^"  yj  3S  "C  ■ao 

-9«        COi-i  WCO 


^ 


t 


?53= 


C4    :ud    :03 


_..    sSsSSssS 

r^       PH  «  at  w  eo  CO  iH 


§5    '=2^ 
5    :3r 


05       CO  - 


12 13    i?3 


S^ 


3 
>< 


55552553     5     55    ■2255? 


^'m 


If 


; '  *1 

■  ■^  1 


Ili 


'\' 


h 


1  I 
'!  i 


'    'I 

i  : 

1 

!  ' 

f'    • 

<l     ■ 

7 

\i        ' 

«        ) 

\  ' 

1,     1  1 

186 


ECONOMIC  lUSTOllY. 


annuities  was  X 201, 73/), 059,  and  tho  annual  ('liarfijn  was 
uC!*,471,(575).  From  that  tiino  to  tho  ikmicc  of  Aiulcns 
hardly  a  year  passed  witliout  wltncHsing  some  increase  to  tho 
national  burdens,  so  that  at  niiilrtumnier,  1802,  the  capital 
of  th(^  funded  and  unfunded  del)t  amounted  to  i:(i:{7,000,00(>. 
On  tlie  oth  of  Junuury,  181U,  tho  capital  was  XHSr),l8(J,323, 
and  tlie  annual  charge  was  £32,457,141.  The  preceding 
statements  exhibit  the  progressive  state  of  tho  ])ublic  income 
and  expenditure  frona  17i)2  to  1849,  including  the  annual 
charge  on  account  of  tlie  public  debt;  and  the  amount  of 
money  raised  by  loans,  aiul  the  fimding  of  Exehe(pier  Hills, 
with  the  amount  and  description  of  stock  created,  and  the 
annual  chai'ge  in  respect  of  the  same  in  each  year  from  the 
beginning  of  the  present  century. 

An  extraordinary  degree  of  delusion  is  observable  in  tho 
proceedings  of  the  dilTerent  finance  ministers  by  wlumi  the 
support  of  the  sinking-fund  was  advocated  during  the  war. 
It  has  been  pretended  that  the  'purchases  made  l)y  means  of 
that  fund  had  the  effect  of  keeping  up  the  market  value  of 
the  public  debt,  and  thereby  enal)led  the  minister  to  con- 
tract loans  upon  more  advantageous  terms  than,  without 
this  machinery,  would  have  been  jiossible.  It  may  well  be 
doubted,  however,  whether  the  repurchase  in  th's  manner, 
from  time  to  time,  of  parts  only  of  that  8urj)lu8  portion  of 
the  ])ublic  debt  which  was  created  for  the  express  i)urpose  of 
such  o])erations,  had  any  real  effect  in  raising  the  price 
of  the  remaining  portion  of  the  public  securities;  in  other 
words,  whether  the  price  thus  factitiously  acted  upon,  of  the 
larger  amount  of  debt,  was  at  any  time  greater  than  the 
price  would  have  been  of  the  smaller  amount  of  debt  that 
would  have  existed  if  the  sinking-fund  had  not  been  created, 
the  purchases  of  the  commissioners  never  having  in  fact 
accomplish(!d  more  than  the  repurchase  of  the  so  needlessly 
created  part  of  the  debt.  It  has  been  further  urged  in  de- 
fence of  the  sinking-fund  that  the  prospect  which  it  enabled 
the  minister  to  hold  out  of  the  speedy  redemption  of  the 
whole  debt  had  the  effect  of  reconciling  the  people  to  the 
payment  of  a  larger  amount  of  taxes  than  they  would  other- 


's 
,-f 

I 
-I 


'Id 


FINANCES   OF  ENGLAND. 


137 


I 


wisd  liiivf  lu'fii  \villinj»  to  pay.  Allowiuij  Hint  tho  cfi't'ct 
liorti  Hinted  wiih  id'oduccd,  wo  mny  Htill  doiil)!  llu'  wisdom  of 
tliiit  ^ovcriiinciit  which  is  olilij^i'd  to  ri'sort  to  ii  jiijrjilc  in 
order  t<»  rccoiudh'  the  people  to  its  incasiin's,  and  cspfciiilly 
when,  lis  in  tho  case  under  cxamiiiiition,  tlio  didusioii  was  so 
asivo  and  likely  to  prove  so  permanently  injurious  in  its 
.i.iiure. 

The  iiveriigo  rate  at  whieh  three  per  cent  stock  was  orc- 
at('(l  l)etween  171*3  and  IHOI  was  Xo7  7«.  0(/.  ol'  money  for 
£100  stock,  and  the  average  market  price  during  that  i)eriod 
was  j£()l  17s.  Chi.  for  XlOU  stock.  Tho  loss  to  the  piihlic  upon 
tho  additional  sum  borrowed  in  order  that  it  might  l)e  re- 
deemed dining  that  period,  which  was  £4!),(;r)5,r)t)l,  amounted 
to  four  and  a  half  per  cent,  or  X2,234,5UU.  IJetween  1803 
and  the  termination  of  the  war  the  average  price  at  which 
loans  were  contracted  was  jGGO  7s.  OJ.  per  £100  stock,  and 
tho  average  market  price  during  that  time  was  <£<]2  Xla.  (Sd. 
per  £100.  The  loss  was,  therefore,  two  and  a  half  per  cent 
n  >u  the  sum  redeemed  during  that  time,  <£17li,173,240  or 
'04,331,  making  together  an  amount  of  £0,038,831  al)so- 
;  lost  to  the  pultlic  by  these  operations.  This  amount, 
reckoned  at  the  average  price  of  the  various  loans,  is  eijulva- 
lent  to  a  capital  of  more  than  eleven  millions  of  thire  ]»or 
cent  stock,  with  which  the  country  is  now  adiiitionally  hur- 
dcncd  through  tho  measure  of  borrowing  in  a  depressed 
market  more  money  than  was  wanted  in  order  to  its  being 
repaid  when  the  market  for  ))iil)lic  securities  was  certain  to 
bo  higher.  The  fallacy  attending  this  system  is  now  so 
fully  recognized  that  it  is  not  likely  any  minister  will  in 
future  make  a  show  of  redeeming  debt  at  the  moment  when 
circumstances  compel  him  actually  to  increase  its  amount 
for  that  purpose. 

Another  error,  of  a  still  more  important  nature,  involved  in 
this  system  remains  to  bo  noticed.  The  uljsurdity  of  borrow- 
ing money  in  order  to  extinguish  debt  could  never  have  been 
seriously  adopted  but  wnth  the  anticipation  of  the  pood  effects 
that  might  bo  drawn  from  such  a  course  after  the  necessity 
for  further  borrowing  should  cease,  when  it  might  be  benefi- 


^tl 


■'I 


m 


^1 

Ci    f  1 


m 


Mi 


•  I 


II  111 


i.fi 


138 


ECONOMIC  msroRY. 


t.' 


cial  to  a])))!}'  towards  the  redemption  of  the  debt  the  high 
scale  of  taxation  wliich  that  system  rendered  practicable. 
There  never  could  liave  existed  any  doubt  of  the  fact  that 
'  whenever  the  necessity  for  bori'owing  should  cease  the  mar- 
ket value  of  the  public  funds  would  advance  greatly,  and 
would  therefore  in  an  equal  degnjc  limit  the  redeeming 
power  of  the  sui'j)lus  income,  however  arising.  The  knowl- 
edge of  this  fact  should  have  led  the  ministers  by  whom 
successive  additions  were  made  to  the  i)ublic  debt  to  the 
ad()j)tion  of  a  course  ^vhich  would  have  enabled  them  to  turn 
this  rise  of  prices  to  the  advantage  of  the  public,  instead  of 
its  being,  as  it  has  proved,  productive  of  loss;  and  this  end 
would  certainly  have  been  accomplished  if,  at  the  expense  of 
a  small  jjresent  sacrifice,  the  loans  had  been  contracted  at  a 
high  rate  of  int. -rest,  instead  of  their  having  been  contracted, 
as  for  the  most  ))art  they  wcsre,  in  three  i)er  cent  auimitics. 
It  is  presumable  that  if  the  borrowing  had  been  restricted  to 
the  sums  actually  wanted  from  time  to  time,  without  thought 
of  a  sinking-fund,  the  public  might  possibly  have  had  to  pay 
at  the  outside  a  quarter  per  cent  moi'e  of  annual  interest 
than  they  actually  paid.  At  this  rate  the  deficiency  of  in- 
come compared  with  expenditure  between  1793  and  1815, 
which  amounted,  as  will  be  shown  in  the  next  table,  to 
^425,482,701  would  have  occasioned  an  addition  to  the 
capital  of  the  debt  to  the  amount  of  .£455,200,554  of  five  per 
cent  stock,  the  annual  interest  of  which  would  have  been 
£22,703,327,  instead  of  a  nominal  capital  of  ,£547,202,764, 
with  the  annual  additional  charge  of  £20,000,871.  At  the 
close  of  the  war  the  nominal  ca]>ital  of  the  debt  would  have 
then  amounted  to  £724,285,720,  and  the  annual  charge 
to  £32,530,000,  instead  of  £810,311,030  of  capital,  and 
£30,458,204  of  annual  charge,  which  was  the  state  of  the 
unredeemed  public  debt  on  the  5th  of  January,  1810.  The 
government  would  then  have  been  in  the  most  favorable  posi- 
tion for  taking  advantage  of  the  lowering  of  the  rate  of  inter- 
est which  was  certain  to  follow,  and  many  years  before  the 
present  time  the  whole  of  the  five  per  cent  annuities  might 
have  been  converted  without  any  addition  to  the  capital  into 


FINANCES  OF  ENGLAND. 


139 


annuities  of  the  samo  amount  bearing  interest  at  the  rate  of 
three  and  a  half  per  ecnt  or  jicrhaps  lower.  Assuming,  how- 
ever, that  the  reduetion  would  not  have  gone  lower  than 
tliree  and  a  half  per  cent,  and  taking  into  consideration  the 
surplus  revenue  which  has  been  actually  aj)i)lied  to  the  re- 
demption of  debt  between  5th  January,  181(5,  and  oth  Janu- 
ary, 1849,  which,  as  will  be  seen,  amounted  to  £45,779,04(5, 
the  funded  debt  existing  on  5th  of  January,  1837,  would 
have  amounted  to  £(578,500,083,  and  the  annual  charge  to 
X"2a,747,734,  instead  of  its  actual  amount,  £773,108,310, 
and  ils  actual  annual  charge  £27,080,458;  showing  that  the 
loss  entailed  on  the  country  by  the  plan  pursued,  of  funding 
the  debt  in  stocli  bearing  a  nominal  low  rate  of  interest,  is 
£94,(501,033  of  cai)ital,  and  £3,938,724  of  annual  charge. 
It  is  not  ))ossible  to  calculate  with  certainty  the  further 
benefits  that  uuist  have  resulted  from  the  repeal  of  five  mil- 
lions and  a  half  of  annual  taxes,  which  would  have  been 
practicable  beyond  the  amount  actually  repealed;  but  it  is 
probably  much  under-estimating  those  benefits  to  state  that 
among  their  results  the  amount  of  public  income  over  expen- 
diture would  have  Ijeen  so  far  augment((d  that  the  unredeemed 
debt  would  not  at  this  time  have  exceeded  six  hundred  mil- 
lions, while  the  annual  charge  upon  the  same  would  have 
been  twenty-one  millions,  a  state  of  things  at  which,  if  the 
peace  of  Europe  should  continue  undisturbed,  and  if  our  pro- 
gress should  only  ecpuil  our  past  experience,  we  may  possibly 
hope  to  arrive  in  about  half  a  century. 

Tlie  charge  of  inconsistency  on  the  part  of  our  finance 
ministers  is  fully  deserved  by  their  adoption  of  two  meastncs 
having  for  their  objects  results  exactly  opposed  to  each 
other.  These  measures  are,  first,  the  creation  of  what  is 
called  the  dead-weight  annuity;  and,  secondly,  the  conver- 
sion of  pcrj)etual  annuities  into  ainiuities  for  lives  or  for 
terms  of  years;  the  effect  of  the  first  being  to  l)ring  present 
relief  .at  the  expense  of  future  years,  while  the  second  in- 
creases the  present  burden  with  the  view  of  relieving  pos- 
terity. When  the  measure  for  commuting  the  half-pay  and 
l)ensions  was  brought  forward  in  May,  1822,  the  charge  upon 


M 


•h 


m 

M 


:=il' 


140 


ECONOMIC  HISTORY. 


f 


li 


•    Mil! 
» ,lt 

-J  ■•ill 

!!    I:'- 


the  country  on  that  account  was  estimated  at  about  five 
millions.  This  was  necessarily  a  decreasing  charge,  and 
from  year  to  year  the  public  would  have  been  relieved  by  the 
falling  in  of  lives  until  at  the  end  of  forty-five  years  the 
whole,  according  to  probability,  would  have  been  extin- 
guished. In  order  to  turn  to  present  advantage  this  pros])CC- 
tive  diminution  of  burden,  it  was  attempted  to  commute  the 
whole  of  those  annually  diminishing  payments  into  an  un- 
varying annuity  to  last  during  the  whole  probable  term  of 
forty-live  years;  and  it  was  computed  that,  by  the  sale  of  a 
fixed  annuity  of  £2,800,000,  funds  might  be  obtained  in 
order  to  meet  the  diminishing  demands  of  the  quarterly 
claimants.  This  scheme  was  only  partially  carried  into 
executi(m  by  means  of  an  arrangement  made  with  the  Bank 
of  England,  under  which  that  corporation  advanced  to  the 
government,  in  nearly  equal  payments,  during  the  six  years 
from  1823  to  1828,  the  sum  of  £13,08iU19  as  the  purchase 
money  of  an  annual  annuity  of  £080,740  to  be  i)aid  until 
1807.  The  result  of  this  operation  has  been  to  save  the 
immediate  payment,  during  the  years  in  which  it  was  in 
progress,  of  .£9,574, 979,  and  in  return  to  fix  upon  the  coun- 
try the  annual  payment  for  thirty-nine  years  thereafter  of 
£585,740. 

In  the  prosecution  of  the  opposite  plan  of  converting  per- 
petual annuities  into  annuities  terminable  at  stated  periods 
or  upon  the  occin-rence  of  certain  natural  contingencies, 
the  amount  of  terminable  annuities  has  advanced  from 
£1,888,83.5,  at  which  it  stood  at  the  end  of  th  ,  war,  to 
£3,755,099  at  the  beginning  of  the  year  1850.  It  would 
o(H'u))y  considerable  space  to  exhibit  the  i>rogress  of  this  con- 
version from  year  to  year,  and  it  will  j)robably  suffice  to 
cxemi)lify  the  result  of  the  operation  during  one  year  (1834). 
In  that  year  the  perpetual  annuities  received  in  exchange 
amounted  to  £6,500,169  of  capital,  bearing  an  annual 
charge  of  £202,831,  and  there  were  granted  in  lieu  of 
the  same, — 


jr 


FINANCES  OF  ENGLAND.  141 

Annuities  for  lives £195,337 

"         for  terms  of  years 313,138 

Deferred  annuities 2,871 

Together £511,346 

makinii;  a  present  annual  increase  of  £308,51-1  to  the  public 
burdens  in  o.ucr  to  ensure  the  earlier  extinction  of  the 
charge  of  £202.831. 

It  is  not  necessary  here  to  inquire  which  of  those  two 
modes  of  proceeding  is  preferable.  Under  different  circum- 
stiuiccs  either  of  tlicm  might  be  wise  or  prudent,  but  it  is 
(juite  im|)Ossible  that  at  the  same  time,  and  consequently  un- 
der the  same  circumstances,  both  could  be  either  wise  or  pru- 
dent; and  the  minister  and  legislators  by  whom  the  plans 
were  proposed  and  sanctioned  must  be  allowed  to  have  stulti- 
fied themselves  by  the  o])crations.  Of  the  two  courses  that 
is  assuredly  the  most  generous  under  which  the  parties  by 
whom  it  is  adopted  subject  themselves  to  additional  burden 
in  order  to  lighten  the  load  for  their  successors;  and  indeed 
it  would  seem  no  more  than  an  act  of  justice  on  the  part  of 
those  by  whom  the  debt  was  contracted  to  adopt  every  means 
within  their  power  for  its  extinction. 

It  is  singular  that,  with  so  much  experience  and  so  much 
of  scientific  acquirement  that  could  have  I)een  brought  to  the 
correct  elucidation  of  this  subject,  the  tables  adopted  for  the 
creation  of  terminaljle  armuities  were  incorrect  to  a  degree 
which  entailed  a  heavy  loss  upon  the  jMiblic.  The  system 
was  established  in  1808  and  during  the  first  year  of  its 
operation  annuities  were  granted  to  the  amount  of  X58,r)06 
lO.s'.  ])er  annum.  Of  that  amount  there  continued  payable 
£23, 2.")1  ))er  annum  at  the  beginning  of  1827,  when,  to  adojjt 
the  calculation  of  the  actuary  of  the  national  debt,  as  given 
in  a  report  to  the  Chancellor  of  the  Exchequer,  the  public 
had  already  sustained  a  loss  of  more  than  £10,000  by  the 
transactions,  besides  having  the  above  annual  sum  of  £23, 2')1 
still  to  pay  for  an  indt'linite  term.  In  this  report  of  Mr. 
Finlaison  he  states  that  the  loss  to  the  ]uiblic  through  mis- 
calculation in  these  tables  was  then  (April,  1827)  proceeding 


.Hi 

,  1 


,'tl 


IS 


. ;  1,. 

m 

T^ 


Mi'- 


Hi' 
I'  [■ 


1  f 


I    I 


it 


ih 


3  II 


ij 


k 


-  jijii 


ill! 


1    i-, 

K      1 

1 

1      i 

ly 

M    4 

142 


ECONOMIC  HISTORY. 


at  the  rate  of  .£8,000  per  week,  and  during  the  three  preced- 
ing months  had  exceeded  £95,000.  The  discovery  of  this 
bUnider  had  been  made  and  pressed  upon  the  attention  of  the 
finance  minister  as  early  as  1819,  but  no  active  steps  were 
taken  to  remedy  It  until  1828,  and  even  then  the  rates  at 
which  annuities  were  granted  upon  the  lives  of  aged  persons 
were,  after  a  time,  found  to  be  so  unduly  profitable  to  the 
purchasers,  that  the  government  was  again  obliged  to  inter- 
fere and  to  limit  the  ages  upon  which  life  annuities  could  be 
obtained. 

It  is  quite  impossible  that  any  similar  scries  of  blunders 
could  have  been  committed  by  any  private  persons  or  as'-  .- 
ciation  of  individuals  whose  vigilance  would  have  been 
sufliciently  preserved  by  their  private  interest,  and  it  is  dis- 
graceful that  the  government,  which  could  at  all  times  com- 
mand the  assistance  of  the  most  accomplished  actuaries, 
should  have  fallen  into  them.  It  is  yet  more  disgraceful 
that  after  the  evil  had  been  discovered  and  pressed  uj)on  its 
notice,  so  many  years  were  suffered  to  elapse  before  any  step 
was  taken  to  put  a  stop  to  the  waste  of  public  money. 

It  would  require  a  voluminous  account  to  explain  all  the 
financial  operations  of  the  government  during  the  period 
embraced  in  the  foregoing  statements.  In  the  earlier  years 
of  that  time,  while  on  the  one  hand  the  minister  was  an- 
nually borrowing  immense  sums  for  the  public  service^  an 
exi)ensive  machinery  was,  as  we  have  seen,  employed  to  kcej) 
up  a  show  of  diminishing  the  debt,  and  by  this  means  the 
people  were  brought  to  view  with  some  degree  of  compla- 
cency the  most  ruinous  addition  to  their  burdens  under  the 
expectation  of  the  relief  which,  through  the  magical  effect  of 
the  sinking-fund,  was  to  be  experienced  by  thom  in  [future 
years.  The  establishment  and  sup[)ort  of  this  sinking-fund 
was  long  considered  as  a  master-stroke  of  human  wisdom. 
Having  since  had  sulhcient  opportunity  for  considering  its 
effects,  M'e  have  arrived  at  a  different  conclusion,  and  can  no 
longer  see  any  wisdom  in  the  plan  of  borrowing  larger  sums 
than  were  wanted,  and  })aying  in  conse(iuenee  more  dearly 
for  the  loan  of  what  was  actually  re(iuircd  in  order  to  lay 


,   /r*»»*i"' 


FINANCES  OF  ENGLAND. 


143 


out  the  surplus  to  accumulate  into  a  fiind  for  buying  up  the 
debt  at  a  higher  price  tliau  that  at  which  it  was  contracted. 

In  the  fourth  report  of  the  Select  Committee  on  Public 
Income  and  Expenditure,  which  was  printed  by  order  of  the 
House  of  Connnons  in  1828,  there  are  three  statements 
showing  the  difference  between  the  public  receipts  and  dis- 
bursements in  the  ten  years  ended  5th  January,  1802;  the 
fourteen  years  ended  r)th  January,  1816 ;  and  the  twelve 
years  ended  oth  January,  1828,  an  abstract  of  which  is  here 
given;  and  the  statement  is  further  continued  for  the  twenty- 
two  years  ended  5th  January,  1850 :  — 


BALANCES  OF  INCOME  AND  EXPENDITURE. 

Ten  Years  ended  5lh  Januaiy,  1S03. 


Expenditure  .    £447,812,77.3 
Income     .    .      268,659,322 


Expenditure 
more  tlian 
income  .     . 


.£189,153,451 


Raised  by  creation  of 
debt 

Applied  to  redemption 

of  debt £180,340,440 

Money  raised  for  Aus- 
tria              4,600,000 

Diseoiint  and  eliarges 
of  receipt   ....         2,410,497 


£380,997,.380 


Balance  5th  January, 

1802 £0,027,021 

Balance  5tl)  January, 

1792 4,540,029 


Fourteen  years  ended  oth  Jiiniiari/,  1S16. 


Expenditure  £1,059,083,370 
Income      .     .      823,354,000 


Expenditure 
more  than 
income  .    .   £230,329,310 


Raised  by  creation  of 

debt    ..... 
Applied  to  redemption 

of  dil)t £651,952,051 

Raised  for  East  India 

Company    ....  2,.50O,0OO 

Discount,  etc.      .     .    .         2,887,199 


187,302,937 
£193,034,443 

4,480.092 
£189,153,451 

£900,107,717 
657,.3.39,850 


Balance  5th  January, 

1810 £15,406,578 

Balance  5th  January, 

1802 9,027,021 


£242,707,867 

0,4.38,557 
£236,320,310 


]  M 

■  -i 


f.i 


, 


•  in 


• :  I  'M 


1 

1  1   til! 

H 

i      '^1 

\ 

li 

f      '^ 

\      ' 

1 

A 

1  ; 

t    1 

(i 

i  ■it 

■    (  ' 

*  f 

H 

1  1  ^ 

' 

1 

Hii 

1 

iJMi 

i   .1  ) 

»     t 

i 

:  1! 

1 

if 

1: 

hk- 

«   !' 

;l.'^ 

1! 

i  \ 

1(    ■ 

t|       ■    • 

'1 

■i 

'In' 

ii 

Hf_ 

144 


Income 
Expenditure . 


ECONOMIC  HISTORY. 


Twelve  Years  ended  5th  January,  1828. 


£C70, 198,280 
640,000,021 


Income  more 
tlian  expen- 
diture   .    . 


Applied  to  redemption 
of  debt    

Discount  and  charges 
of  receipt    .... 


Raised  by  creation  of 
debt 


£C80,454,422 

544,688 

£680,999,040 

640,6:50,450 


Balance  5th  January, 

1810 .£15,465,578 

Balance  5th  January, 

1828 4,228,76.3 


.£29,231,766 


Twenty-two  Years  ended  5th  January,  1850. 


£40,408,690 


11,2.30,825 
£29,231,765 


Income      .     .£1,002.219,072  :  Applied  to  redeiuptinn 
Expenditure.    1,076,045,391        of  debt,  beyond  the 


Income  more 
than  expen- 
diture    .     . 


£10,574,281 


amount  of  debt  cre- 
ated    

Balance  5th  January, 

1850 £9,748,639 

Balance  5th  January, 

1828 4,228,753 


£11,064,405 


5,519,786 
£16,574,281 


It  api>oars  from  this  statement  that  during  the  ten  years 
from  5th  Jan.,  1792  to  5th  Jan.,  1802 : ~ 

The  public  expenditure  exceeded  the  income   .     £180,153,451 
Between  1802  and  181G  the  excess  of  expendi- 
ture was 230,329,310 


Excess  of  expenditure  during  twenty-four  years 
of  war £125,182,701 

During  tliirty-four  j'oars  of  peace,  between 
1810  and  1850,  the  excess  of  income  over 
expe.iditure  has  been 45,779,010 

At  this  "ate  it  wouhl  require  three  hundred  and  sixteen 
years  of  peace  to  cancel  the  debt  incurred  (hiring  twenty-four 
years  of  Avar,  or  thirteen  years  for  one;  but  the  eom])arison  is 
even  more  unfavoral)lo  than  this,  l)ecause  at  the  time  of  bor- 
rowing the  rate  of  interest  is  high  and  the  *  ?,lue  of  })ublic 


FINANCES  OF  ENGLAND. 


146 


securities  low,  whereas  at  the  time  of  liquidation  the  reverse 
of  these  circumstances  is  ex])ericnccd ;  so  that  on  the  most 
favorable  suitposition  it  requires  iiftecn  years  of  saving  in 
jicace  to  repair  the  evil  consequences  of  one  year  of  war  ex- 
j)cmliture;  at  which  rate  our  successors  who  may  be  living 
about  the  close  of  the  twenty-second  century  might,  if  during 
all  that  time  the  nation  should  remain  at  peace,  find  them- 
selves relieved  from  that  portion  of  the  pul)lic  debt  which 
has  bei'u  contraetetl  since  1792.  On  the  other  hand,  this 
period  would  be  somewhat  hastened  through  the  extinction 
of  that  part  of  our  puljlic  debt  which  consists  of  terminable 
and  life  annuities. 

It  is  necessary  here  to  explain  briefly  the  financial  ])lans 
which  have  at  different  times  within  the  present  century  been 
proposed  by  the  Government  and  sanctioned  by  Parliament. 

At  the  breaking  out  of  the  war  in  1803  it  became  neces- 
sary to  meet  as  far  as  possible  the  increased  expenditure  of 
the  country  by  the  imposition  of  new  taxes,  among  which 
was  included  the  income-tax  under  the  name  of  a  property- 
tax.  The  greater  part  of  these  taxes  were  declared  to  be  of 
a  temj)orary  character,  and  were  to  cease  in  six  months  after 
the  re-estal)lishment  of  peace.  It  socm  became  apparent, 
however,  that  to  adhere  to  this  stipulation  would  be  impos- 
sible, since  the  exigencies  of  the  country  recpiired  the  con- 
traction of  loans,  the  interest  of  which  could  not  be  provided 
except  by  the  gradual  appropriation  of  one  jtortion  after 
another  of  the  proceeds  of  the  war  taxes.  Under  these  cir- 
cumstances it  was  proposed  in  1807  by  Lord  Henry  Petty, 
then  Chancellor  of  the  ExelRMpier,  to  depart  from  the  usual 
practice  of  conlining  the  financial  arrangements  to  the  cur- 
rent year,  and  to  determine  at  once,  as  far  as  was  possil)le, 
the  amount  which  it  would  be  necessary  to  raise  during  each 
one  of  a  series  of  years,  providing  beforehand  the  means  for 
uieeting  the  increasing  burden.  It  was  assumed  that  the 
loans  to  be  raised  in  1807  and  the  two  fcdlowing  years 
shoidd  be  each  £12,000,000;  that  for  1810  was  stated  at 
.£14,000,000,  and  during  each  of  the  ton  ensuing  years  the 
amount  was  assumed  at   £10,000,000.     It  was   calculated 

10 


V 

I- 


i 


\\   \ 


>  III 


f  ■ 

1 

■fc 

1  '■ 

'1  ^ 

li   ' 

■  Ik 


;i:i 


i  > 


,   F    III 
»      '  I 


146 


ECONOMIC  HISTORY. 


that,  the  intorost  ui)on  those  hxans  Avouhl  bo  mot,  up  to  that 
for  the  year  1811,  by  the  falling  in  of  annuities,  after  which 
the  war  taxes  were  to  l)c  pledged  at  the  rate  of  ten  ])er  cent 
upon  each  loan;  five  per  cent  to  pay  the  interest,  and  live  per 
cent  to  accumulate  as  a  sinking-fund  for  discharging  the 
principal.  The  deficiency  that  would  be  occasioned  by  this 
appropriation  year  by  year  of  the  war  taxes  was  to  be  met  by 
su])plementary  loans,  for  the  interest  on  whicli,  and  to  pro- 
vide a  sinking-fund  for  their  redemption,  it  would  be  neces- 
sary to  impose  new  taxes.  By  these  means  it  was  expected 
that  the  country  would  have  been  able  to  meet  the  chai-gos  of 
an  ex])onsive  war  during  a  series  of  years  with  only  a  moder- 
ate addition  to  the  public  burdens.  The  ministry,  of  which 
Lord  Henry  Petty  formed  a  part,  having  gone  out  of  oflice 
before  the  next  annual  linance  arrangement  was  brought  for- 
ward, his  plan  was  abandoned,  and  no  attempt  has  since  been 
nuide  by  any  minister  to  form  linancial  arrangements  em- 
bracing the  circumstances  of  future  years. 

The  exjjlanations  offered  each  year  in  the  House  of  Com- 
mons by  the  Chancellor  of  the  Exchequer  concerning  the 
financial  condition  of  the  country  are  not  given  in  such  a 
form  as  to  be  readily  understood.  In  the  accounts  by  which 
the  statements  arc  accompanied,  the  interest  of  the  debt  and 
other  permanent  charges  are  not  included,  and  on  the  other 
hand  nothing  is  stated  regarding  the  produce  of  the  perma- 
nent taxes,  forming  what  is  called  the  consolidated  fund, 
excejjt  the  amount  of  its  surplus  or  deficiency,  as  the  case 
may  be,  after  providing  for  the  permanent  charge  upon  it. 
The  Builin't,  as  it  is  the  practice  to  call  this  annual  exposi- 
tion, explains  on  the  one  hand  the  sums  roiiuired  for  the 
public  service  during  the  year  under  the  different  heads  of 
Navy,  Army,  Ordnance,  and  Miscellaneous  Services,  to- 
gether with  any  incidental  charges  which  may  api)ly  to  the 
year;  and  on  the  other  hand  are  ^\\cn  {he  ways  and  means 
for  meeting  the  same.  These  ways  and  means  consist  of  the 
surplus  (if  any)  of  the  consolidated  fund,  the  annual  duties, 
and  such  incidental  receipts  as  come  in  aid  of  the  national 
resources. 


FINAXCES   OF  ENGLAND. 


147 


The  detail  of  tliuso  hiulfjcts  would  conscciuently  throw  but 
little  light  upon  the  linanoiiil  condition  of  the  country,  if 
even  thuy  had  been  preserved  in  an  authentic  form,  which  has 
not  been  done.  Any  statements  of  the  kind  that  could  be 
offered  must  be  drawn  from  unauthorized  publications,  in 
which  they  have  been  given  without  regard  to  methodical 
arrangement,  while,  as  respects  some  years  of  the  series,  wc 
sliould  seek  in  vain  for  any  statement  whatever. 


1  ■■  rf 


:  n.:i 


te'^ 


Twr 


1 


¥ 


1 1!  hp 


ii.-  • 


)         ! 


|: 


ii 

'ft 


I    Mr 


1    I    »'. 


*    'II 


148 


ECONOMIC  HISTORY. 


VII. 

LA    POLITIQUE    COMMERCIALE   DE    LA 
IIESTAUIUTION. 


J 


I 


FuoM  Lkvasski-u's  IIistoiuk   des  Classes  OuvitifcuEs  en  Fiiance 
DEi'fis  1781)  jusQu'A  Nos  Jouus,'  — Vol  I.  in-.  405-128. 

LES  lois  coinmcrcialos  qui  dcvralent  etrc  principalemcnt 
fondiics  8ur  Ics  bcsoins  de  la  consummation,  sont  sub- 
ordonnd'cs  en  r^ialitc  a  la  politifiuc.  Faitcs  i)ar  dcs  hommcs, 
il  Icur  arrive  trop  souvcnt  do  porter  remj)reinte  dcs  i)assions, 
ct  de  rcprescnter  moins  la  nature  des  rapi»orts  dconomiqucs 
d'unc  nation,  que  Ics  intercts  particulicrs  et  les  prejug(5s  de 
ccux  qui  la  gouvernent. 

11  n'l'st  |)us  de  lois  huinaincs  qui  soicnt  i\  I'abri  de  ce 
ddfaut ;  mais  il  n'cn  est  peut-etre  i)as  qui  en  soicnt  jjIus 
ordinairement  afTcct(?cs  que  les  lois  relatives  au  commerce 
cxtcrieur.  La  Rcpubliipie  ct  TEmpire  s'etaicnt  acharnds  a 
la  lutte  centre  les  Anglais  ;  la  legislation  douaniere  fut  alors 
urm(!C  en  guerre  ct  li<^rissde  de  prohibitions  belliqucuscs :  lo 
but  dtait  dVcarter  rcnnenii  de  la  place.  La  Restauration  fut 
l)acifique,  mais  obligde  de  se  concilicr  les  grands  propri(jtaires 
ct  les  grands  manufacturiers  (pii  formaicnt  la  majoritd  do  la 
Chambrc;  la  legislation  douaniere  se  pliant  h.  leurs  exigences, 
continua  a  se  hdrisser  de  {)rohibitions  mercantilcs  ct  <5goistes : 
le  but,  cctte  fois,  dtait  de  r(?servcr  le  marcli(5  {\  ccux  qui  fai- 
saient  la  loi. 

Le  systeme  continental  dtait  devcnu  odieux  aux  populations. 
Il  dtait  certain  que  le  nouveau  gouvcrncment  commenccrait 
l)ar  le  renier.  D'aillcurs  la  force  des  choses  y  poussait.  A  la 
suite  des  armdes  dtrangorcs,  dtaient  entrees,  dans  nos  ports 

1  Paris :  L.  Ilachettc  et  Cie,  1867. 


i 


^. 


LA   POLITIQUE  DE  LA    llESTAURATWN. 


149 


lations. 

Iicerait 
Ala 
ports 


ct  par  toutos  nos  frontitJrcs,  Ics  donrdcs  colonialcs  ct  les 
marohaiulises  anglaiscs.  Lcs  prix  avaiout  <5prouv(j  unc  revo- 
lution Houilaiuc,  ot  Ton  voyait  so  produirc  cctto  bizarrcrie,  quo 
Ic  sucro,  par  cxoniple,  so  vondait  coimmmuiuout  38  sous  la 
livro  au  moinoiit  ou  la  loi  lo  frap|)ait  oiiooro,  on  droit,  d'uiic 
taxo  do  44  sous,  ct  empochait  ainsi  les  nogociauts  do  rctircr 
lcs  approvisionncmcnts  (pi'ils  avaiont  dans  loa  cutrepots  :  il 
otait  impossihlo  do  maiutcnir  la  loi.  Lcs  Anglais  d'aillours, 
douts  lcs  d(f;sirs  d'taiont  alors  dcs  ordrcs,  en  soUioitaicnt  le 
rii])pol.  I'ou  do  jours  apros  son  cntrdo  i\  Paris,  Ic  comto 
d'Artois  signa  deux  ordounances,  Tunc  qui  supprimait  lea 
('ours  prevotak'S,^  I'autrc,  (pii  levait  lcs  obstacles  mis  au  com- 
morco  niaritiinc.2  Los  taxes  ])i"oliiliitivcs  furent  remjdacecs 
])ar  un  droit  tres  modere  sur  lo  sucre,^  ct  le  cafe  ct  par  un 
simple  droit  do  balance  sur  lcs  cotons  en  lainc. 

Cottc  mcsure  sc  lieurta  contro  une  double  opposition. 
L'administration  im])driale,  formdc  i\  rdcolc  do  la  prohibition, 
s'c'tait  habituoc  depuis  treizo  ans  a  en  pratiquer  les  maximes ; 
ellc  t'tait  en  gon<!ral  imbue  dc  I'csprit  du  systeme  ct  d'autant 
moins  disposoo  il  y  rcnoncer  que  ringdrcnce  dc  I'Etat  dans 
lcs  affaires  commcrcialcs  lui  donnait  plus  d'importaucc.  Do 
leur  cote,  lcs  grands  industriels  ctaient  dcsireux,  comnic  tou- 
jours,  do  privileges  ct  jiartisans  dcs  restrictions  douaiiiercs. 
.Mais  ils  etaicnt  pcut-ctro  plus  cxcusal)lcs  qu'c\  d'autres 
epoques,  parcc  (pic  leurs  int(irets  etaicnt  plus  quo  jamais 
ancrds  sur  le  fond  dc  la  prohibition.  Grace  ^  lours  richesscs, 
ils  dtaient  appcles  a  reprdsenter  Tindustric  fran^aisc,  ct,  par 
unc  illusion  asscz  ordinaire,  disposes  a  prendre  Icurs  intercts 
jjour  les  sicns.  Ils  allaient,  avec  lcs  grands  jiroprictaircs, 
dieter  lours  conditions  aux  ministrcs. 

La  Restauration  se  trouva  placec  ontro  lcs  deux  ponvoirs 
de  I'dpoquc,  Tadministration  ct  la  Chambre,  (pii  votilaiont  la 
protection,  Tune  par  habitude,  Tautro  par  calcul.  La  protec- 
tion triompha ;  lcs  tarifs  prirent  un  nouvoau  caractorc  non 
molus  exclusif  sur  certains  points  (pic  cclui  de  rEmpire,  ct 

1  Ord.  (In  20  .ivril,  1814. 

2  Ord.  du  23  avril,  1814.    Voir  le  Moniteur  de  1814,  p.  461. 
^  Le  Sucre  fut  taxe  a  6  sous  la  livre. 


4 


'V| 


■I 

■f 

r 

r 


4'    I      'I" 

•      :'"■ 


1 1  ■'  i'l 


II 


150 


ECONOMIC  HIS  TO R  Y. 


d'uilleiirs  bcaucoti])  plus  diiiigcroux ;  parcc  qu'on  prdti'udit 
driver  en  uii  8}>tt'inu  conuncrcial  n'guliur,  co  qui  n'avait  6t6 
juH(|ue-li\  qu'une  conscMiuencc  regretti'o  do  IV'tat  du  guorrc. 

Ijii  I'l'luriiic  ilu  coiiitu  d'Artuis  soidcva  uno  tcmpC'tt!  do  n'rlji- 
niiitions.  Ou  aurait  pu  croirc  que  k-s  mauufacturiors  soraioiit 
satisl'aits  dc  ho  pntcurcr  la  luaticJre  promic'ro  h  bun  niarelu'. 
II  u't'ii  fut  riuu.  I/iutt'ret  du  prdscnt  lea  avcuglait  asscz  sur 
riuttTct  do  I'avouir,  pour  quo  les  cotonuicra  dc  Toucst  ct  du 
nord,  80  protoiidissout  ruiiu's,  ))ar('o  ([tio  rahaissoniont  dos 
droits  8ur  lo  cotoii  allait  diiuiiuior  d'autant  la  valour  dos 
(jtolTos  (pi'ilH  avaiont  ou  niagasin.  lis  i)(5tilioiinorcnt,  6cv\- 
viront  (ja'auc  "  inunonso  population  scrait  r(5duito  au  ddses- 
poir,"  quo  '■  la  prohibition  ost  do  droit  politi(iuo  et  social,"  ct 
(pio,  dopuis  lt(  i'abrioaut  jus(pi'ii  Touvrior,  tons  ont  "  lo  droit 
do  fournir  cxolusivoniont  a  la  consonunation  du  i);iys  (pi'ils 
liabitcnl."'  lis  domandaiont  oO  millions  d'indoninito,  ot  la 
prohibition  dos  Ills  ct  dos  tissus  dc  colon :  ils  obtinrcnt  la 
prohiiiition. 

Los  niaitros  do  forgos  (^devaiont  d'autrcs  ])rdtcntions.  L'Kui- 
pirc  n'avait  impost',  il  ost  vrai,  qu'une  taxo  modi(pio  do  44 
francs  par  lonno  (lOOO  kilog.)  sur  Ics  tors  en  barrc.  Mais  la 
guerre  formait  uno  barriorc  plus  ditlicilc  h  franchir  quo  Ics 
douanos  ct  duraut  vingt  ans  Ics  hauts  fourneaux  du  conti- 
nent u'avaicnt  pas  eu  i\  rodoutor  los  i'ors  anglais.  Apros  la 
paix,  ils  so  trouvoront  tout  ii  coup  surpris  par  uno  concur- 
rence qui  livrait  scs  prodiiits  a  30  ou  40  pour  100  au-dossoiis 
dos  prix  ordinaircs,  ct  par  unc  crisc  commerciale  qui  paraly- 
sait  la  vento.  Vivos  reclamations.  Lcs  maitrcs  dc  forges 
voulaiont  siuon  uno  indenniite,  au  moins  le  setpiostrc  imnu?- 
diat  dos  fors  (pii  otaiont  encore  en  entrepot  et  la  ]irohibitioa 
des  fors  etrangers;  ils  obtinrcnt  Ic  (juadruplemont  du  droit 
(pii,  decime  compris,  fut  portd  k  1G5  francs,  taxc  rcj)rdsen- 
tant  environ  50  pour  100  dc  la  valour  dc  la  marchandisc  ou 
cntre]»ot.2 

Lo  baron  liouis  n'avait  pu  resistor  <\  I'oragc.  Cepcndant  il 
nc  dissimula  i)as  (pie  Ic  gouvernemont  approuvait  pcu  rcsj)rit 

'  Voir  aux  Arch,  de  I'Emp.,  I'original  d'uno  <le  ces  petitions  (25  avril,  1814). 
'■^  Voir  M.  Aine,  Tarifs  des  douanes,  chap,  xviii. 


LA   POLITIQUE  DE  LA    ItESTAURATION. 


If)! 


lant  il 
'esprit 

1, 1814). 


do  mnnopolc  dcs  iniiniiriicturii'i's.  "  Loh  prohiliiliuurt  aliHolucs 
(k'trui.sL'iit  ri'imiliitioii.  Ausni  cspt'roiiH-iKiii.s,"  ajoiitiiit-il, 
"  poiivoir,  aiix  sossioiis  prochaiiics,  dciuaiuler  la  r<^ducti()n  h»ic- 
ccssivo  (111  tarif  (luo  nous  propoaoiis  aujourd'hui  siir  los  fcrs."  ' 
11  so  faisait  illii.sioii.  Les  iutc'rots  soiit  plus  toiiaces.  lis  so 
]>r<^cipitrr('nt  i\  la  ciirc'o,  r(^claniaiit  i\  I'divi,  (pii  pom-  les 
colons,  (pii  puiir  les  C'iuvcurs,  (pii  pour  les  niaiiiil'at'turicrs  ; 
i;t  CO  que  cliacun  d'eux  obtiiit  ii  titro  de  fuveur  passagere,  il 
pr^^tcndit  le  consorvcr  coinine  unc  propriety;,  11  s'en  lit  niomo 
uu  litre  pour  ohtcnir  dc  nouvoaux  avautag(!S.  ("est  aiiisi  *\\w 
Ics  lois  proti'ctionistes  se  suocederent  ct  s'aggraven;ut  de 
session  cii  scMsioii. 

liC  gouverncnient  sonireait  <\  fairc  unc  rcfonto  gen(1ralc  du 
I  aril'.  11  n'cn  cut  pas  le  loisir  cu  181-1,  et  so  coutenta  de  pre- 
sentcr  uii  projot  par  lo(|U('l  il  auforisait  le  transit,  donnait  au 
pavilion  lranf;ais  la  faveur  d'une  surtaxe,  et  relevait,  inais  a 
uu  taux  encore  trcs  moderc,  certains  droits  abaisses  par  I'or- 
donnance  du  '1"^  avril.''^  il  s'excusait  de  no  pas  fairo  plus, 
j)arcc  qtu;  les  douanes  venaicnt  a  peine  d'etre  rdtablies,  et  il 
liasardait  tiuiideuient,  ([ue  "  (Taillcurs  le  bon  inarclie  provo- 
(puiit  la  cniisDniuiation."  Tel  u'otait  pas  I'avis  de  la  (Miain- 
bre,  qui  vota  la  loi,-'^  niais  v\\  donnant  une  lo(;on  aux  ministres. 
"  En  prineipe  d'econoniie  politi(pie,"  disait  lo  rapporteur,  "les 
douanes  soiit  (Stabiles  pour  assurer  la  prosp(^rite  dcs  manufac- 
tures, pour  fairo  fleurir  Tindustrie  nationale.  Elles  sauvcnt 
le  comnieree  en  donnant  aux  fabricants  franqais,  par  dos  pro- 
hibitions ou  dcs  droits  sur  les  j)roductions  de  Tindustrie 
('traniri'rc,  ravantagc  de  la  concurrence  dans  le  marcli^-  in- 
terieur ;  elles  sont  utiles  au  consommateur  en  lui  assurant  a 
■niiiindre  i)rix  les  niarcliandiscs  qui  so  fal)ri(picut  exterieurc- 
mcnt  avcc  des  niatiC-rcs  premieres  indiiirnes,  (pie  IV'trau'^er 
aecaparerait.  sons  la  prohibition  ;\  la  sortie.  .  .  .  L'institution 
('  lli'inont  nationale,  lorsquc  la  combinaison  des  dif- 

'("        liMuents  sera  parvcnue  au  point  d'activcr  dans  les 

Anil',  T'lriis  (li'n  ihnnnfs,  p.  02. 
.»t'  40  il  (in  fiMMcs  ]mr  quiiunl  nietriqiic  sur  le  sucre  brut, 

sur  lo  cafo, 


(iO      " 

100      "        "         " 

*  Loi  du  17  (leccmbrc,  1814. 


H 


I 


i;)i 


li 


sur  Ic  cacao. 


■<;h 


m 


152 


ECONOMIC  HISTORY. 


'W5 


,     f 

1 

1  •    . 

'  ','  ■ 

if  ^. 

' 

in 


'i 


mains  d'un  million  d'ouvriers  I'instrnmcnt  qui  les  nourrit, 
lorsquc  ccttc  combinaison  repoussera  par  des  proiiibitions 
n<jces8aircs  les  marchandiscs  dtrangdrcs  dont  I'cntrde  porterait 
pr('jnclice  aux  marchandiscs  de  meme  ospecc  qui  sc  fabriquent, 
se  vcndent  et  so  consomment  dans  I'inWrieur."  * 

Lc  ministerc  comprit  la  le^'on,  i)rorait  de  rddiger  scs  lols  do 
douanc  en  vuc  de  la  protection,^  ct  prdscnta,  en  1810,  uu  non- 
veau  projet  pour  refondrc  le  tarif  do  1806,  qui,  jusquc-ljl, 
n'avait  subi  que  des  modifications  do  ddtail.  11  proposait  dca 
droits  plus  forts.  La  Chambre  les  rcnfor(ja  encore,^  acccp- 
tant,  sans  en  poser  la  valour,  les  arguments  qnelquefois  singu- 
liers  que  suggeraient  les  intdrets  on  les  prdjuj^'s.  Un  ddputd 
declarait  la  cdrusc  de  Clichy  excellcnte  pour  la  consomma- 
tion,  supdrieurc  meme,  do  I'avis  do  tout  lc  monde,  i\  cello  do 
IloUande ;  mais,  ajoutait-il,  le  vulgaire  vout  le  cac'iet  des 
manufactures  dtrangi'res  ;  "  pour  Ten  ddgouter,  il  demandait, 
et  il  obtint  un  droit  dnormo  sur  la  cdruso  etrangere."^  Un 
autre  voulait  qu'on  imnosiit  fortemcnt  lc  thd,  parcc  que  les 
Anglais  lo  fournis«c  !.  ct  quo  "  c'ost  autant  do  numdrairc  qui 
sort  do  Franco."  ^  Sur  la  demande  des  agricultcurs,  la  pro- 
hibition des  ])oaux,  i\  la  sortie,  fut  lovde  d'uno  part,  et  d'autrc 
part,  I'entrde  dos  eaux-de-vie,  autrcs  que  de  vin,  fut  prohibdo. 
On  rdtablit,  en  ploino  paix,  les  rigueurs  de  la  Idgislati^n  prd- 
votal'^,  et  Ton  autorisa  la  recherche  et  la  saisie  j\  rintdrieur 
des  dtolTos  proliibdes." 

La  Chambre  introuvable  fut  dissoutc.  Mais  lo  cabinet  cut 
besoin,  on  1817  comme  en  181G,  do  s'appuyor  siu*  uno  ma- 
joritd  qui,  si  ello  no  profossait  pas  les  memos  sentiments  poli- 
tiquos,  avait  en  agriculture  et  on  Industrie  les  memos  intdrets 

'  Hnpport  do  Mnffnii'-firandprez,  MonUeur  de  1814,  p.  1253. 

"-  Mwillriir  de  1815,  p.  l'J53. 

8  Le  ({"uvomeincnt,  par  excmple,  proposait  do  cr(?cr  un  entrepot  h,  Lille. 
Les  (kputt'ji  des  ports  de  nier  se  re'eriferent  et  flrent,  aprJis  un  long  dcTiat,  sup- 
primer  I'lirticle. 

*  Mniiitpur  de  1810,  p.  440. 

'>  11)1.1,  p.  4.'?». 

"  Loi  (hi  28  (irrll,  1810. —  Art.  50.  A  dater  do  la  publication  de  la  prescnte 
lol,  les  colons  fllrs,  les  tissus  et  tricots  de  colon  et  de  laini-  't  tons  autres  tissus 
de  fabriquei<  etrangcrcs  proliib^s  seroni  rcchcrches  ct  saisis  ians  toutc  I'c'tendue 
du  royaume. 


|a 

i) 

""M 

M 

'  ,1 

f 

1 

I 

m 

1 

1 

'  ' 

...  i 

LA    POLITIQUE  DE  LA   RESTAURATION. 


153 


ct  les  mOmcs  exigences.^  La  legislation  commercialc  se  sentit 
done  pcu  till  soullle  libdral  qui  inspirait  alors  Ic  gouvcrnc- 
mcnt.  Lorsquc  la  question  des  tarifs  se  produisit  h,  la  session 
dc  1817,  lo  dircctcur  g(;n(jral  dcs  douanca  so  contonta  de 
glissor  tiniidement  un  (iloge  platonique  de  la  liberty  des 
ecliangos,^  tout  en  ddclarant  aussitut  no  vouloir  porter  aucune 
atteinte  an  systeme  proliiljitif,  "  qu'il  est,"  ajoutait-il, "  sage  dc 
respecter  aussi  longtemps  que  nos  manufactures  se  croiront 
fondocs  a  le  considerer  comme  leur  plus  solidc  appui." 

Les  doput<;s  voulaient  non-seuleraont  le  respecter,  mais  le 
fortifier.  Les  propridtaires,  en  favour  des  raaitres  do  forges 
auxquels  ils  vcndaieut  Icur  bois,  chcrchaicnt  ^  (jcarter  la  con- 
currence des  fcrs  strangers,  et  ne  prenaicnt  gnerc  la  peine  dc 
dissinuiler  le  mobile  qui  les  faisait  agir.^  Les  iudustricls, 
pcnsant  que  "  la  prospdritd  des  manufactures  pent  soul  pro- 
curer des  consommateurs  utiles  a,  I'agriculture,"  *  voulaient 
qu'on  supprimat  tout  droit  d'ontr<;e  sur  les  matiercs  premie  cs, 
et  lo  directeur  g(!n<;ral  avait  quelquc  peine  <\  ddfendre  les  in- 
t<^rets  dn  (isc.  La  loi  du  27  mars,  1817,  ajouta  quelques  re- 
strictions nouvelles  au  commerce  cxtdrieur. 

Cello  du  21  avril  1818  fut  le  sujet  d'un  curieux  ddbat. 
Avant  1780,  les  provinces  d'dtranger  effectif  n'dtant  pas 
comprises  dans  la  circonferencc  des  douanes,  commer^aient 
lil)rement  avec  les  pays  voisins ;  I'Alsacc  dtait  du  nombrc,  et 
avait  gagnd  cinq  millions  par  an  au  transport  des  marclian- 
dises  entre  rAUemagne  et  la  Suisse.  La  Rdvolution,  en  por- 
taut  la  ligne  des  douanes  ^  la  frontierc,  avait  interrompu  ces 

*  Ccpcndaiit  le  rapporteur,  Morgnn  de  BcUoy,  parla  avec  moderation  et  fit 
di>.s  vceiix  pour  Tontier  atTrnncliissoment  des  niatii'res  proiuiorcs  quo  les  circon- 
siiinces  III'  periiK'ttaient  pas  do  di'frrdvor.  —  Munilriir  do  1810,  p.  2'Jl ;  voir  aussi 
la  loi  qui  fut  pi-oniulgut'o  le  28  avril,  181G. 

'*  Sans  (loute  il  est  louable  d'annoncer,  liaiitoment  lo  df'sir  do  cetto  lieureuso 
revolution  dans  le  systeme  commercial  du  mondo ;  niais  nous  n'aurons  pas  la 
Imrdiosse  de  vous  conseiller  d'on  dcvancer  I't'poque.  —  Monileur  de  1817, 
p.  UG. 

'  Lo  goncral  Angior  proposait  un  amondcment  pour  porter  de  20  }i  30  fr.  par 
100  kil.  le  droit  impose'  par  la  loi  du  21  docombre,  1814,  sur  les  fors  lamino's,  que 
k'S  L'trangors  fabriquaicnt  par  des  procedos  cconomiqucs.  —  Moniteur  de  1817, 
p.  286. 

*  Monileur  de  1817,  p.  278.    Discoure  du  comte  Beugnot. 


t  ' 


I* 


4     ^>^l 


^1 


•1' 


i 


>■'! 


!'h 


1 

• 

;i ,; 

1 

« 

1 1 .  ■ 

154 


ECONOMIC  HISTORY. 


relations;  TEmpire,  par  ses  prohibitions  centre  le  commerce 
maritime,  les  avait  en  partie  renoudes ;  muis,  dcpuis  1815,  lo 
bdndfice  en  avait  pasad  au  grand-duclid  dc  Bade.  L'Alsace 
rdclamait.'  Lo  ))rojet  de  loi  donnait  cnfni  satisl'action,^  en 
antorisant  par  divers  bureaux  le  transit  de  certainos  mar- 
chandises  et  surtout  des  dcnrdes  coloniales.  Aussitot  les 
])orts  de  mcr,  dcfenseui-s  ordinaircs  de  la  liiiertd  conmierciale 
(juand  elle  servait  les  intdrcts  particuliers  dc  leurs  armateurs, 
s'dcrierent  (pi'en  pcrmcttant  le  jtassagc  des  denrdes  coloniales, 
on  faeilitait  les  ventcs  des  Ilollandais  en  Suisse,  au  detriment 
dc  la  marine  fran^-aise  qui  avait  la  pretention  de  fournir  seule 
le  Sucre  et  lo  cafd  h  la  Rdpuljlitjue  helvdtiiiue.  En  vain  I'ad- 
ministration  jjrouva-t-clle  surabondamment  qu'il  s'a^issait 
seulement  de  faire  prendre  aux  marcliandises  la  rive  gauche 
du  Uliin  au  lieu  de  la  rive  droilo,  et  (|ue  les  11'  'landais  n'en 
vendraient  pas  une  caisse  de  plus  a  la  Suisse,  ni  nos  ports 
unc  caissc  dc  moins.'^  La  connnission  rejeta  I'article ;  et  la 
Cliambre,  malgrd  les  i)rotestations  des  rcj)r(isentants  d(!  I'Al- 
sace,  vota  sa  connnission.  Cc  fut  seulement  un  an  |)liis  tard, 
i\  la  suite  d'une  eufpiete,  quo  le  miuistero,  jicrsistant  .bins  son 
dcsseiu,  jiai'vint  a  faire  voter  lo  transit  par  TAlsace,  a  la  I'aible 
majority  de  17  voix  sur  195  votants.* 

Cost  par  lo  memo  ministore  que  fut  prdsentde  la  premiere 
loi  conslituant  en  Franco,  a  rimairede  rAn<rl<'t(>rro,  lo  systome 
de  Vrahi'l/c  moliilc.  '•'•  L'inteiet  <ie  bi  propridtd  ot  do  riudustrie 
atrricob;"  I'avait  diofoo.  I'our  la  promioro  fois,  les  rostriotions 
douanieres  robitivos  au  oounnercc  des  cdrdales  furent  dirigdes, 
non  plus  contrc  rex|)or<ation  conuno  on  I'avait  fait  par  lo 
pas8<!!,  mais  centre  Timpertation  ;^  il   falbiit  quo  los  marches 

'  Voir  les  v<riix  ilii  Rns-Rlii!i,  Rpssiona  des  Tonsoils  jn'iu'rntix  dc  1817  ot  dc 
1S18.  Kn  1810,  le  (\)iiseil  k'''"'"''  so  jdaiKiiit  (iiie  k'8  conditions  fiiitcs  nu  tran- 
sit f  nssciit  trop  oncrciisca.  Duns  les  annccs  suivanfos,  w  fiit  le  tour  des  dcpnrtc- 
nicnis  dc  I'ancicnnc  Lorraine  qui  rc'clanicrcnt  dc  nicnie  Ijc'nc'fice  que  I'Alsnoe. 

"  Article  ;!1  du  projct. 

^  Voir  M.  Ami',  Elmle  aronnmiiiiifl  .iiir  le  Itirifds  (li)Uiinrs,  p.  84,  et  le  ^foniteur 
de  1818,  p.  .'!•'!:'..  Le  rapporteur  Morfian  dc  Hclloy  parle  "des  alarmcs  des  no'j{o- 
cianfs  dc»  ports  qui  ont  ii  sc  pn'valoir  de  la  possession  et  des  lois  solcnnellcs." 

*  Loi  .lu  '2C,  niai,  181!). 

*  Cettc  loi  du  10  juillet,  1810, 1'talilissait  a  I'lniportation  un  double  droit; 
droit  fixe  de  25  centimes  par  quintal  de  grains  pour  les  navires  fran\'aig,  de  1  fr. 


LA   POLITIQUE  DE  LA   RESTAURATION. 


loo 


rcstasscnt  aux  fcrmiors  uatiouaux,  dut  Ic  pcuplc  payer  cher 
sa  suljsistaucc. 

La  nalure  dejoua  Ics  calculs  dos  legislatcura.  La  ri-colto 
ftit  ahondante,  ct  li'S  prix,  (juo  la  disottc  do  181G  avait  fort 
cxagort'rt,  haissiToiit.  Do  noiivi'llcs  ri^clainations  so  lircnt 
ontcndre,  d'autant  plus  vivos  (niV'Ucs  (5taient  plus  suros  d'etre 
favoralilonu'ut  dcouteos  sous  radniiuistratiou  du  comte  dc 
Villt'lo.  On  accusait  riniportation.  Verilication  faito,  il  se 
trouva  que  cettc  iini)ortatiou  avait  i\  peine  exeede  I'expor- 
tation  do  700,000  hectolitres.  On  se  rejeta  sur  rdlet  moral 
dcs  arriva<^es  (pii  intiuiidaient,  disait-on,  la  hausse. 

II  fallut  ime  nouvelie  loi,  (pii  donnat  de  nouvelles  facilit<?s 
i\  Texportation  et  init  plus  olistaeles  a  riin|>ortation.  Pre- 
sentee dans  la  session  de  18-1,  par  le  ministere,  remanide  et 
eonsidt'raltlement  ai^irravee  par  la  conunission,  ello  lut  vutee 
par  une  nonil)reu8e  majority.* 

On  se  felieitait  de  niettre  ainsi  les  apjriculteurs  c\  Tabri  de  la 
eoneurrence.  On  n'oubliait  qn'mie  chose  ;  I'inti^ret  des  masses 
dont  le  pain  est  le  principal  aliment.  11  est  vrai  (pr.en  (K'pute 
etait  Venn  soutenir  (pie  la  eherte  du  ]>ain  etait  un  bien  pour 
les  ouvriers,  parce  qu'elle  les  ohlijreait  a  travailler  avee  plus 
d'ardeur  pour  vivre.  !Mais  cetti;  sin<i;ulierc  theorie  trouva  jieu 
d'cclio ;  les  proprietaircs  ii'avaitMit  aueune  intention  d'ait'anier 
la  classe  ouvriere  :  seulenient  ils  soni;'eaient  i\  cux-memes. 
IJeujauiin  Constant  le  leur  lit  sentir.  "  Je  me  hornerai,"  s'ecri- 
ait-il,  interronipu  par  les  murnuires  dt;   rassemblde,  "  je  me 

2")  ])()iir  li's  nnviros  t'tranjicrs ,  ilroit  variiiblo  di-  1  franc  par  cliaiiiic  franc  dc 
liaissi'  lies  ([u'oii  di'sccnilait  dans  k's  triiis  rc'tiimis  dc  la  France  amlcssous  dcs 
prix  norniau.x  dc  'Z-\.  'Jl,  ct  IS  francs;  a  la  liinitc  dc  20,  IK,  ct  I'J  frnnca,  toute 
iinportrtlion  c'tait  intcrdite.  La  loi  fut  vr)t<'c  a  une  innJDi'ic  ilo  2HI  voix 
contrc  28. 

'  I'ar  2S2  vdix  cDntrc  ")l.  Dans  cctic  loi  ilu  t  jiiillct  1>*2I,  la  taxc  variaMc 
connncncait  ii  ctro  pcrcnc  (piaiid  les  prix  ctaicnt  ii  2il  francs  dans  la  premiere 
ilassc,  il  20  ilans  la  dctnii'rc,  ct  les  importations  ccssaicnt  nu  taiix  cle  22  ct  dc 
iS  francs.  L'i'cliellc  nioliilc  a  rimportaiions  fonctioiniait  cntre  20  et  is  francs, 
c'cst-inlirc  (lu'elle  fut  e'lcvee  <lc  2  francs  audessus  de  la  liniile  de  IHl'.t,  I,'e.\- 
liiirtalion,  an  contrairc,  i>erinisc  scidenieiil  jiisqu'ii  2:t  fr.  piir  la  loi  de  IHII),  cut 
2.")  francs  pour  liinite  en  1S21 :  d(nil)lc  avanl;l^;c  pour  Ics  aijricultcurs,  qui  pou- 
vrticnt  exporter  plus  longtcmps,  et  qui  ctaicnt  jdus  tot  ii  I'aliri  do  la  concurrence 
ctnmgure. 


.  r 

-  ^iv., 

■  ? 

m 

-  ': 

'  & 

I 

1  *  1 

V   ,' 

.■■  ■■i-t 

.{,',*, 

•*^1 


^*I 


.1  ':  ■ 


:j. 


■    ,1  « 


m: 


i 


166 


ECONOMIC  HISTORY. 


borucrai  a  vous  dire  qu'il  est  fachcux  do  voir  que  vous  faitcs 
rencherir  lea  dcnrees  que  vos  tcrrca  produisent  et  dout  vos 
grciiicrs  sont  remiilis."  ^ 

CepeiKlant  Ics  elTets  ne  rdpondircnt  pas  h  Tattcntc  dcs  pro- 
pridtaires.  Le  bid  baissa  pour  aiuai  dire  d'aundo  eu  anndc : 
il  toniba  a  14  fr.  80  cent.,  en  1825.  Les  tarifs  u'y  faisaient 
rieu.  Pourtant  ils  dtaicnt  rigoureux  ;  car  diirant  les  neuf 
amides  qui  s'dcoulerent  do  la  publication  de  la  loi  c\  la  rdvolu- 
tion  de  juillet,  I'iniportation  ne  fut  permisc  que  pendant  un 
scul  mois,  en  fdvrior,  1828.  On  ne  ])ouvait  aggravcr  le  tarif. 
Mais  '-  i)our  calmer  Topiuion,"  on  porta,  en  1825,  une  loi  qui 
supprimait  Tcntreput  lictif  dcs  grains. 

L'evdncmcnt  ijui  avait  prdcipitd  la  chute  du  ministorc,  ddji 
chancelant,  dans  lequcl  le  comte  Docazes  avait  tcntd  un  raj)- 
proehement  entre  los  convictions  ro3alistes  et  les  ))rincipes 
libdraux,  n'dtait  pas  do  nature  adoucir  Ic  rdgime  douanier. 
Les  grands  propridtaircs  prirent  une  influence  plus  decisive  et 
le  systomc  protecteur  se  consolida :  tdmoin  la  loi  de  1821  sur 
les  cdrdalcp.  Los  iutdrossds  ne  se  lassaicnt  pas  do  domandor, 
et  cluuiue  concession  faisait  naitre  de  noiivelles  exigences 
qui  se  iiroduisaient  a  la  tribune,  dans  les  pdtitions,  dans  les 
vocux  des  conseils  gdndraux.  Tout  argument  leur  dtait  bon. 
L'industrie  languissait-elle  ;  ils  dddaraient,  comme  les  maitres 
de  forges  de  la  Haute-Sauiio,  qu'ils  dtaicMit  menacds  de  mine 
par  Tintroduction  tro[)  facile  des  fers  dtrangers  et  denian- 
daient  qu'on  renfor(;at  les  barriered.''*  L'industrie  prospdrait- 
clle;  ils  dddaraient,  comme  les  fnln-icants  de  Saint-Quentin, 
qu'il  importait  "  an  jn-ogres  de  l'industrie  miinufacturierc  de 
la  rassurer  completemont  sur  le  maintien  des  lois  jirohibi- 
tivcs."  ^  Pour  la  vente  a  riutdricur,  les  ddi»artemcnts  ])o»tu- 
laiont  i\  I'envi  los  fournituros  do  Tl-^tat,'*  et  I'esjjrit  d'oxclusion 
dtait  tol  que  quebiues-uns  oussont  volontiers  relevd  les  barri- 
dres  du  moyen  flge  au  profit  des  manufactures  ])rovinciales : 
le  Loir-ct-Clier  voulait  qu'on  fit  exclusivenieut  "  habiller  les 

1  Mimileur  du  30  nvril,  1P21. 

"^  Iliuifc  SaoiK'.  —  VdMix  (U'8  Conseils  gi'iuTaux  on  IhU  . 

*  AisiK'.  —  Va'ux  (k's  Consoils  gcnrriiux  en  1825. 

*  Voir  Ilerault  en  1818,  Tyn'nces Orientalis  en  1821,  Aveyron  en  1825,  etc. 


it! 


LA   POLITIQUE  DE  LA   RESTA [/RATION. 


157 


solilats  dc  la  k'giou  do  Loir-et-Chcr,  avec  dcs  draps  et  autres 
dtutVes  dc  la  fabrique  de  llomorantin.i 

Dans  une  telle  disposition  dos  efprits,  Ic  tarif  no  satisfaisart 
jiuuais  toutes  les  cupiditiis.  11  fnt  remanie  par  des  lois  pres- 
(pic  consecutives  rcndues  en  1820,  en  18-2,  en  1826,^  sans 
compter  Ics  projcts,  qui  u'aboutirent  pas  et  les  ordounances 
(pii,  dans  rintcrvalle  des  sessions,  aggraverent  plusicurs  taxes. 
L'administration  elle-meme  se  fatigua,  et,  en  1822,  le  dircc- 
teur  general  osa  felicitcr  ironiqucment  les  deputes  de  n'avoir 
apportc;  aucun  changcment  i\  la  loi  des  douanes  dans  le  cours 
de  Tanncc  procddente.  "  C'est,  disait-il,  un  avantagc  que  nous 
ainierions  k  voir  se  r(;p<3ter.  Les  lois  de  douanes  vculent  etre 
staliles."  ^    Les  ddputds  pcnsaient  autrement.* 

Apres  les  grains,  la  question  principalc  a  la  Chambrc  ^tait 
cello  des  fers,  qui  rdunissait  dans  un  niojne  interet  les  direc- 
tcurs  des  usines  et  les  jjroprietaires  dos  bois.  La  loi  du  17 
decombrc,  1814,  avait  (jleve  les  droits  sur  les  fers  de  toute 
espL'ce  ;  niais  dans  la  repartition  dcs  favours  du  tarif,  les  acicrs 
avaient  otd  les  moins  favorises.  lis  rdolamoront,  au  nom 
memo  de  leurs  progres,^  et  la  loi  du  7  juin,  1820,  fit  droit  a 
lours  jdaintos  en  augmentant  les  taxes  de  4o  h  (50  pour  100 : 
c'dtait  fra{)per  directemcnt  les  instruments  iudispensablcs  au 
travail,  limes,  faux,  outils.  Mais  il  cntrait  dans  lo  systomo 
do  la  Cliambro  de  pr<jf<5rcr  Tinterot  du  proibicteur,  int^irrt 
immddiat,  exigeant,  calculant  son  profit  par  grosses  sommcs, 
a  rint<;ret  du  consonmiateur,  dont  la  perto  somblait  Idgere 
parcc  ([u'clle  se  repartissait  sur  un  grand  nombro  de  totes. 

La  monic  loi  facilita  la  sortie  des  lainos  indigonea  et  mit  un 
droit  c\  rentrdc  dos  lainos  dtrangores.  Les  fabricants  dc  draps 
firout  une  opposition  vivo.     Mais  cotte  fois  encore  la  cause  de 


J  Si] 


»  Session  lie  1819. 

«  Loi  (lu  7  juin,  1820 ;  loi  du  27  juillct,  1822  ;  loi  du  17  mai,  1826. 

8  Mc'iiitinr  de  1822,  p.  80. 

*  "Souniettro  les  douanes  ii  une  rtgle  invariable,  c'est  leur  interdiro  les  pro- 
gr&9  qu'unc  lounble  emulation  aspire  sans  cosse  favoriser."  —  ilunilitir  de  1820, 
p.  52tj,  Ivnpport  de  Morgan  de  Belioy. 

*  r.e  jury  ilos  arts  leur  ik  rendu  leg  plus  honorablcs  tdmoignages  et  la 
grande  niajorite  de  votre  Commission  Ji  pense  qu'il  convenait  de  leur  accorder 
renuourageuient  de  nouveaux  droits.  —  Moniteur  de  1820,  p.  66. 


i: 


;l 


* 


^*;i 


I*' 


.4 

It 
'f 

•4 
t 


il"^! 


iijij 


'■  • 

K 

It 

!^ 

!5; 

1   *; 

i 
1  . 

['' 

l!. 

i'j 

'.  1.         ; 

.  i'  i     ) 

1 

158 


ECONOMIC  UISrOllY. 


la  production,  fortifido  do  rintdret  agrlcolc,  I'emporta  Bur 
rinteivt  dos  cousommatcurs ;  ^  ct,  loiscja'apres  uiio  longuc 
discussion  qui  avait  on,  commc  toujours,  pour  r(;sultat  d'ag- 
graver  lea  taxes  primitives,  lo  vote  d'ensemblc  cut  lieu,  il  se 
trouva  dans  I'urne  185  boules  blanches  contrc  unc  seule  boule 
noire.*'*  Les  ddputds  ne  purent  s'empecher  dc  rirc ;  il  y  avait 
alors  sur  la  question  du  systeuic  protecteur  unc  parfaite  en- 
tente entre  Ics  partis. 

L'accord  dtait  dcvenu  moins  unanimc  on  1822.  Lc  prix 
des  fers  fabricpids  au  bois  et  an  marteau  avait  baiss<5  par  un 
de  ces  accidents  frdtiuents  du  marelu:?,  dont  on  dolt  s'applaudir 
(piund  ils  out  pour  cause  unc  production  plus  dcouoniiipie.^ 
Nouvelles  doleanees  des  niaitrcs  de  forges  (pii  s'en  jtrirent 
a  Timportation,  et  obtiurent  unc  ordonnance  augnientant  les 
droits.  Aussitot  des  reclamations  de  tout  genre  assaillirent 
le  ministere  (pii,  bien  que  pen  dispos<)  a  remanier  les  tarifs,  dut 
coder,  en  declarant  (pic  rintort't  du  fisc  dtait  cette  fois  tout 
it  fait  dtranger  a  la  mesure.'*  11  pr<iscnta  un  projet  qui,  commc 
le  disait  lc  baron  de  Saint-Cricq,  dans  I'exposd  des  motifs, 
avait  pour  but  "  de  protdger  ct  pour  cela  d'encourager  par  de 
forts  droits  sur  les  produits  du  dehors,  de  ddfendrc  memo 
par  des  prohibitions  toutcs  les  exploitations  du  sol,  tons  les 
efforts  do  rindustrio."  Vouloir  proteger  tout,  c'eut  dtd  ue 
rien  i)rotdgcr. 

Neanmoins,  la  Chambrc,  tronvant  le  projet  insuffisant,  lc 
rcfondit.  Lc  rajjporteur  dc  la  connnission  dtait  IJourienne. 
Celui-ci  ])rofc3sait  commc  princijie  dconomiciuc  (jue  lc  j)euple 

'  Le  projot  niiiiist('rii'l  nvnit  mis  un  droit  do  20  pour  100,  nti  lieu  de  In  pro- 
liiliition,  pour  les  cliales  Ciii'lieiiiires,  parceque  cette  prohibition  etiiit  tout  ii  fait 
iilnsoire.  L'assemblee  rc'tabiit  la  prohibition;  cettc  fois  les  fabrieants  de  lai- 
iiage  appu.vi'rent,  et  la  Clianibre  vote  ii  runaniniite.  —  Moniltw  de  1820,  p.  607. 

■^  Monilmr  de  1820,  p.  (120. 

'  Les  fers  ail  hois  ou  au  marteau  etaient  tonibe's  de  400  a  500  francs  la  tonne 
par  suite  de  la  concurrence  des  fers  ii  la  liouille  ou  la  laniiuoir. 

■*  "  Les  autres,"  disait  le  baron  de  Saint-Cricq,  "  inodifient  quelques  articles  du 
tarif,  non  duns  I'inti'ret  du  Tresor;  car  plusicurs  taxes  subissent  une  reduction, 
et  I'augmentation  proposc'e  sur  quelques  autres  aura  pour  effet  d'attenuer  les 
recottes  en  restreifjnant  I'importation  des  objets  qui  en  seront  grev^s,  niais 
dans  la  seule  vue  de  satisfaire  it  des  intcrOts  nouvcaux  ou  luiuux  constates."  — 
MoniUur  de  1822,  p.  79. 


LA   POLITIQUE  DE  LA    RESTAURATION. 


159 


"  Ic  pins  riclic  (jtait  toiijours  cclui  qui  cxportait  Ic  plus  ct  qui 
importuit  lo  moins."  11  cu  d<;vt'lopi)ait  Ics  cons<3<iuoncc8  pur 
des  arguuiL'iits  que  rAssi'iuljleo  out  sans  doute  nioins  approu- 
v(?s,  si  clle  out  6i6  jjIus  desiuturessiie.  "  Lcs  lois  do  douanes," 
disait-il,  "  en  favorisant  ct  en  satisfaisant  un  grand  nonibrc 
d'intt'ivts  genuraux,  blesscnt  quolcjucs  intc-rot-s  jjarticulit-rs  ; 
niais  cV'st  uu  nial  in(jvitable,  ot  lorsipiMl  est  bien  di'niontre 
qu'uue  m»!sure  est  utile  au  grand  nonibre,  il  i'aut  la  prendre. 
Dans  les  soeietds  humaines,  tout  so  riisout  i)ar  des  majorit<58. 
Lc  marcliand  en  gdiidral  repousse  les  droits  (pii  diniinuent  sea 
profits.  Foreo  do  s'adresser  in  I'industrie  interieure  il  gagncra 
pcut-ctre  nioius,  nuiis  lc  pays  y  gagnera  \)\\m.  Tout  ce  qu'im 
peuple  c<insnmnie  est  un  {"lenient  d'aisanec  ct  do  prosp(5ritd 
nationales ;  tout  cc  qu'il  consomme  par  (^change  est  encore 
favorable ;  tout  co  qu'il  aehetc  avec  dc  I'argcnt  pour  sa  con- 
somniiition,  I'appauvrit." 

Les  vit'illes  crrcurs  de  la  balance  du  commerce  dtaient  en- 
core vivaces.  Mais  il  (itait  au  moins  singulicr  d'invoqucr 
rint(?rot  gc^-neral,  (piaud  les  oljjots  fra])pi's  do  droits  (^taient 
de  ceux  que  tout  le  monde  consomme,  quand  on  faisait  cn- 
clu'rir  le  sucre,  la  viande,  et  le  for  au  j)rofit  de  trois  cati^gories 
do  produeteurs.  Le  comto  dc  Laborde  ne  craignit  pas  de  le 
lour  rcprocher.  "La  loi  quo  vous  allez  rendre,"  dit-il,  "est 
esscntiellement  privildgiairc  ;  c'est  unc  prime  que  toute  la 
France  va  payer  aux  colons,  aux  maitres  de  forges,  aux  nour- 
lissouis  dc  bcstiaux  do  la  Xormandio."  En  eiTet  la  loi  du  27 
j  lillet,  1822,  portait  principalement  sur  ces  trois  points. 

La  loi  du  28  avril,  1810,  avait  mis  sur  les  sucres  (Strangers 
lino  taxe  supdrieure  de  33  pour  100  !\  cellc  des  sucres  de  nos 
e()loni(>s:  grande  favour,  qui  en  pen  (riinndes  doulila  le  chifl'ro 
lies  im])ortations  eoloniales  et  permit,  en  1821,  i\  nos  planteurs 
de  placer  en  Franco  M  millions  do  kilogrnmmes  de  suere, 
tandis  (|uc  les  Strangers  n'en  vondaient  (pie  2.t!00,000  kilo- 
grammes, Cepcndant,  les  planteurs  so  trouvaient  gC-n^^s  par 
eolte  concurrence;  ils  ()l)tinrent  (|ue  la  surtaxc  filt  dlevde  ii  ^)0 
|)OMr  100.  Les  interessiis  auraient  voidii  j)lus  encore.  lis 
tomborent  de  Charybde  en  Scylla  ;  car,  si  les  sueres  <5trangors 
ue  vinrent  plus,  le  sucic  dc  bettcrave,  soUicitd  par  lcs  liauts 


I 


i 

•'■' 

wwt 

\ 

;:i 

■M 

V 

.:J|*| 

M 


m 


n    Mn 

r- 

1    \^ 

1 

'r 

1  - 
I     ■  1 

I  ■ 

vU 

[■■' 
i  *■■" , 


f 


I 
I 


f- 


» .''if 


160 


ECONOMIC  HISTORY. 


piix,  Ics  rcmpla^a  ct  disputa  bicntot  Ic  marchd  aux  produits 
dca  Antilles. 

Lc8  ba'iifs  ciitraicnt  en  franchise  sous  TEnipirc  :  ils  avnicnt 
dte  souniis  aii  droit  moderc  do  3  francs  a  partir  de  18Ui,  ct  ils 
cuntinuiiieut  a  entrer.  Los  (jleveurs  rt'clamorent  ct  le  isiisiistrc 
dut  jtroposer,  dans  son  projot,  do  decupler  la  taxe  siir  les 
ba'ufs  j^ras.  C't'tait  enorme  surtcit  un  pays  oil  "  la  \  iande 
est  un  objet  de  luxe  pour  les  classes  infurioures,"  conuue  tlisait 
un  depute.  La  Chanibre  ne  le  jugeait  pas  ainsi ;  elle  demanda 
beauc(jup  plus,  et  Unit  par  obtenir  50  francs.  Kn  nienie  temps, 
nialgie  le  niinistere,  elle  augnieuta  les  taxes  d'entrde  sur  les 
laines,  sur  les  suit's,  sur  les  viaudes  fraiehes  et  saldes. 

Les  nuiitres  de  forges  deelaraicnt  le  droit  de  105  fr.  tout  k 
fait  insuUisant,  et  le  direeteur  gendral,  soutenant  leurs  preten- 
tions, annon(,'ait  avec  efl'roi  que  Timportation  des  i'oules  s'etait 
dlevde,  en  six  aus,  de  800,000  kilogrammes  a  7,000,000.  "  C'd- 
tait,"  ajoutait-il,  "  un  avertissoment  jjour  radministratiou."  ^ 
Le  droit  sur  les  fers  a  la  houille  fut  porte  i\  275  fr.,  repn'son- 
tant  120  pour  100  de  la  valeur  des  marchaudises  auglaisea 
qu'on  voulait  dcartcr.  On  reussit ;  car  la  production  du  gros 
fer  doubla,  et  I'importatitm  auglaise  deviut  i»resi|ue  nulle. 
Mais  le  fer,  qui  sous  Louis  XVI.  valait  350  fr.,  moiita  a  050 
fr.  la  tonne.  C'etait  un  triste  progres.  Kucore  les  forges  ne  re- 
cueillircnt-ellos  pas  le  profit  de  ce  lourd  impot  jirdleve  sur  I'in- 
dustrie  nationale.  "Nous  faisions  (piel(pies  benelices,"  disait 
en  1828  un  propridtaire  d'usinc,  "(puiud  lujus  vendiuus  a  450 
fr.,  et  nous  perdous  aujourd'hui  en  vendaut  i\  500  fr. ;  la  cause 
en  est  (lu'en  1810  la  bannc  de  charbon  revenait  i\  18  fr.  05  c, 
tandis  qu'ello  revient  t\  37  fr.  50  c."  L"a vantage  restait  aux 
proprietaires  fonciers. 

Les  plus  clairvoyants  on  les  nioins  engagds  dans  les  iutdrets 
prohibit iounistes  couimen(,'aient  i\  eutrevoir  le  danger  du  sys- 
terae.  Ternaux  Ic  signalait:  "  L'lvspagnc,"  disait-il, "  a  rdpondu 
par  unc  prohiliition  de  nos  produits  manufactures  i\  I'impot  mis 
sur  les  laines,  et  le  ralentisscment  de  la  draperie  a  fait  baisser 
les  laines  fram^aises." '^    Plusicurs  s'etonnaient  qu'une  matiere 

»   Voir  Ic  Monilnir  do  1822,  p  010. 
*  ilontUur  Ju  1822,  p.  3Uy. 


mi 


LA   POLITIQUE  DE  LA   RESTAURATION. 


IGl 


promu-'rc,  telle  que  la  fonte,  fiit  jxnir  ainsi  dire  proBcritc,^  et 
lo  cointo  (1(>  Lal)()rde  8'iiuli<,'nait,  au  noiu  tlu  projjres  imliistriel, 
(piMl  cut  J'allii  payer  7,000  fr.  de  droit  pour  iutroduire  c\  Saiul- 
Eticnne  uno  niachiue  a  vapour.''*  Mais  Ics  prohibitionnistcs 
uioutraiout  en  perspective,  au  nioiudre  relAchoment  des  ri- 
irueurs,  lo  marolu'  Irancjais  ouvahi,  nos  ateliers  formes,  nos 
ouvriers  sans  travail,  et  obteuaient  sans  peine  uu  vote  favor- 
able, en  <''V(H|uant  le  i'antonie  de  la  ruiiio  et  do  la  njisere  uni- 
versellcs  |M)iir  r(:^torquer  Targument  de  lours  advorsaires  on 
favour  des  consoniniatours.'' 

Memo  apr^'s  la  loi  do  1822,  il.s  roolamaient  encore.  Ladrolte 
trouvait  que  lo  niinistero  n'avait  pas  assoz  fait  pour  Tafj^rioid- 
turo  et  pour  lo  oonunorce.  Kilo  provoipui,  en  1823,  la  creation 
d'un  eoniite  dVncpiote  qui  dcvait  "  s'attacher  surtout  ^  reeh(>r- 
eher  si  les  ol)jet8  (?tran<;ei8  iniportrs  en  Franoe  y  sout  d'une 
ndocssite  iudispensaldo  connuc  niatiero  premiere."'* 

Vivomeut  attaipid  a  oo  sujot  par  lo  comle  do  Vaublane, 
ancien  miuistro,''  le  baron  dc  Saint-Cric(|,  (pii,  (b^puis  le  eom- 
monoonient  de  la  Hcstauration,  oecupait  le  postc  de  dircoteur 
lioneral  (k's  douanos,  so  ddfendit  par  une  lettro  in8<5rdc  au 
Mii)utiu)\  professnut  bautoment  la  doetrino  protootionniste,^ 
(]u'il  avait,  disait-il  defondue  avant  M.  de  Va\iblanc,  mais 
det'larant  (pie  pour  la  rendre  prati(pic  il  fallait  sc  jj^ardor  do 
la  pousseur  a  roxtremo,  et  rappolant  les  favours  dont  le  gou- 

'  Entrp  nutrc's,  l)nvergior  ile  Ilniiranne  ct  Lniiie. 

2  MoHiU'ur  do  1822,  pp.  031)  ot  040. 

'  "  Liiissi'z  I'litriT  k's  tissiis  ile  cotnn,  li's  drnps,  1p»  fn'iVnccs,  log  fors,  les 
fiiiitcs,  It'.s  siHTi's,  ct  iiiu'  foiilo  (I'mitri's  nrlicloa  (pu'  vdiis  ho  poiivoz  ciicon'  fiib- 
riquiT  on  prodiiire  nil  prix  de  nos  voisiiis,  la  C()iis('(jucik'o  imiiu'dinte  stTft  la 
ruiiie  de  vos  I'olonieH,  ile  vos  niamifactiires,  la  niisi're  dc  deux  millions  d'ou- 
vriiTS,  I'cxportatioii  r.  pido  de  votrc  numt'riiire  ct  la  diiiiiinitioi)  plug  rapide 
I'licore  dc  vos  coiilribtitioiis."—  I)is<'onrs  dc  15<iuricnne,  rapporteur,  en  rcponse 
!i  Laliliiy  dc  Poiipiircs  ;   Mtmitrur  de  1822,  p.  '.MI2. 

■•  Moiiili.ii  do  182!J,  st'ance  du  15  mars,  p.  'MO.  Lo  niinistero  pnsn  la  question 
d'fltat,  dcelaiant  qu'll  scrait  danpereux  (|uc  la  Cliand)rc  eni|>ietut  sur  les  at- 
tributions dc  la  puissance  exe'cutive,  ct  la  proposition  fut  rijctco;  la  droite 
inuriuura.  ("est  ii  ce  propos  (pie  furent  pulilics  Ics  premiers  tableaux  du  com- 
nierec  exterieur;  rattft(jue  cut  au  moiiis  de  ce  cot»'  un  bon  rcsultat. 

'  Pu  Commrree  de  la  France  en  1820  if  1H21,  broeliurc. 

'  "  II  n'cst  pas  de  bon  tarif  pour  la  France  que  celui  qui  ri'serve  aux  Fran- 
cais  le  plus  de  travail  possible." 

11 


m  '-''^T 

"'  ^ll 

;t," 


102 


ECONOMIC  HISTORY. 


W 


veruemcnt  avait  comMi'  les  aj^riculteuis  ct  los  manufacturiers, 
trop  (iiil)lit'ux  d(.'S  sorvioes  passi^.s.  Cctto  Icttri!  pout  f'trc 
rc'^ardec  cumuu,'  lo  iiianifcsto  do  radmiuLstration  douanic'rt!  dii- 
rant  cotfo  j»(;riodo  :  "  Dopuis  la  Rcstauration,"  disait  lo  l)an)n 
do  Saint-Cric(i,  "  Ics  lois  do  doiiaiioa  so  sent  applicpidcs  con- 
stainmcnt  i\  concilior,  dans  la  vuo  d'linc  protection  connniino, 
Ics  intci'cts  soiivcnt  oppos^^s,  toiijours  distincts,  do  ra^iiciil- 
tiirc,  dc  riudiisti'io  et  du  conuucrco.  .  .  .  J\.'  dcniandcrai  a 
ragi'iculturo  si  co  n'est  pas  it  cos  lois  qii'cllc  doit  ot  Ics 
taxes  d'inipoitation  (pii  la  pi()l(f\u;ont  contrc  un  noniI)rc  in- 
lini  do  produits  dtrangcrs,  tcls  (pu!  Ics  l»l(^s,  Ics  bcstiaiix,  Ics 
laincs,  Ics  jraraiiccs,  Ics  clianvrcs,  Ics  lins,  Ics  liouldoiis,  (pic 
lo  systcmo  constant  dcs  taril's  anlcricurs  ctait  d'attircr  par 
uuo  cntioi'o  ininiiuutd,  ot  los  IVanohiscs  d'cxportalion  (pii 
ouvrcnt  un  facile  (jcoulonicnt  il  dcs  produits  que  los  lois  an- 
cicnnos  nc  setaient  jamais  appli(iudc3  qu'a  rotonir?  Jo  dc- 
juandorai  ;\  notro  Industrie  nianiii'actuiici'o  si  co  n'cst  pas  dans 
cos  memos  lois  (prollo  a  trouvo  ct  lo  mainticn  dcs  j^arantics 
(pie  le  travail  national  avait  prde^^dcmment  ohtcnucs  ot  los 
jrarantios  ninivolles  sans  IcsciucUcs  nos  forges,  nos  ral)ri(|uos 
do  faux,  dc  limes,  de  ceruse,  de  minium,  do  zinc,  ot  do  cuivrc 
Inminf^s,  ct  hcaiicoup  d'autrcs  encore,  seraicnt  loin  du  liaut 
(lotiii;  dc  iirosp(5ritd  auqucl  cllcs  sont  i)arvcnucs?  Je  doman- 
dcrai  cnlin  an  connncree  maritime  si  ce  n'est  pas  frrace  i\  ccs 
lois,  ct  jo  ne  craindrai  pas  d'aj(Hitor,  trraco  a  Icur  lihdrale  ap- 
jilication,  qu'il  a  i)U  donner  I'cssor  i\  scs  armemciits,  prot(j<i</s 
p(tur  la  premiere  fois  par  dcs  droits  diflcrcntii'ls,  f;r;idu(?s 
suivant  le  jtavillon  ot  la  longueur  de  la  course,  cnticprendrc 
avcc  8ecnrit(5  dcs  sp(?cidiitions  lointaines,  (pic  les  taxes  po8t(j- 
ricurcs  i\  rontrcpriso  out  constammcnt  respcct(:;os,  jouir,  quant 
anx  cntrepi^its,  an  transit,  an  cal)otage,  et  nn'^tnc  an  rcgleincnt 
(Ics  droits,  dc  toutcs  Ics  francliises,  de  toiites  Ics  facilitcs, 
(le  toutes  les  exceptions  rigourcuscment  compatiljlcs  avcc  I'ac- 
complisscmcnt  dcs  lois  gdndralcs  et  dc  la  suretd  des  per- 
ceptions ? "  ' 

Lc8  intdrcss^'s  nc  so  payi^rcnt  pas  du  souvenir  dc  bicnfaits 


1  Moniteur  de  1823,  p.  156. 


LA   POLITIQUE  DE  LA    ItESTAUnATION. 


168 


qii'ils  avaicnt  pour  la  pliipart  csooinpK'a.  lis  on  voiiliirt'iit  ot 
ils  en  armclictrent  d'autrt's,  d'alxtnl  par  dos  ordoiiuuiiccs ; 
puis,  8UU8  Charles  X.,  par  la  lol  du  17  iimi,  1820,  qui  diininua 
Ics  droits  d'cxportation,  ct  aj5<j;rava  cncurc  dans  inio  pro- 
portion oon»i(K'nil)li;  los  droits  d'cnfreo  sur  la  plupart  dcs 
produits  aiirit'oles.  Li'S  laincs  i)futes  L'trauj^crcs,  par  oxonipK', 
(pii  payaiont  10  I'l".  an  tarif  de  la  loi  do  1820,  avaicnt  <:!tc' 
inipost'cs  i)ar  onlonniinco  i\  30  fr.  on  1823,  a  40  on  1824,  ct  la 
loi  do  1826,  sanotionna  celtc  dorniorc  taxo :  c'dtait  en  (pidtpic 
Kortc  cxcluie  ontiorcniont  los  inipoitateurs  do  nos  niarclios 
ruraux.  Autre  ajr^Ji'avation  sur  les  ba-ul's  (pii,  nuiigres  ou 
gras,  payoront  oO  fr. ;  mOnio  droit  pour  los  chovaux.  Sur  los 
couvorturos  do  laine,  I'acicr  fondu,  los  cordages,  les  plumes 
a  ocriro  ct  d'autros  articles,  les  taxes  fnrent  doublees.  Idles 
fureut  {piadrupldcs  sur  la  plupart  dos  tissus  de  (il.  Pes  sur- 
taxes nouibreuses  fiu'ent  iniposees  sur  les  niareiiaudises  ini- 
portees  par  navircs  (Strangers ;  dcs  primes  d'cxportation 
aceordees  anx  manufacturicrs.^ 

La  loi  do  182<'>,  eonipu'ta  le  systemc  restrictif  de  le  Restat:- 
ratiou.  tiuel([ues-uns  do  S(>s  plus  iial)il(>s  del'enseui's,  le  eumte 
de  Villelo  eutro  autres,  lo  consideraient '•  comme  un  moyen 
teinporairo,  mais  indispensable,  ofl'crt  a  la  production  fran- 
(,aise,  do  so  niottrc  autant  que  la  nature  des  clioses  le  permot, 
en  (^(|uilil)rc  avoc  la  production  etrangere."  ^faia  cos  pro- 
liil)itions  temporaires,  loin  do  tendrc  <\  disparaitre,  dovaicnt 
I'atalemenI    se  luultipiier,  s'aggraver,  so  consnlider. 

Lc  gouvernemcnt  CVaM  plus  sago  (pie  les  partis.  Toutefois, 
s'il  avait  sur  ccs  (pjcstions  plus  dc  luniiercs  que  la  Chanibre, 
I)arcc  (pi'il  etait  moins  aveugld  par  des  interets  jtarticulicrs,  il 
n'avait  ni  dcs  convictions  assoz  fortes  ni  une  puissance  assez 
iM(lc|MMidantc  pour  resistcr  victorieuscmeiit :  pcu  dcs  ministrcs 
auraient  consent i  i\  joucr  Icur  portefcuille  sur  une  question  dc 
douanca,  surtout  avcc  tant  dc  chances  dc  perte.  Le  gouvornc- 
ment  so  contentalt  done  de  modcrer  les  ardours  inconsiderc^es 
dcs  |)rotectionnistos,  tout  en  se  proclamant  ouvcftcnicut  lc 
dcfcnseur  du  systemc.     Do  temps  a  autre,  il  faisait  entendre 


1 


M 


^ill 


1  Voir  le  Monitettr  de  1826,  pp.  177  et  807. 


104 


ECONOM  -   HISTORY. 


'it 


i\  lii  tribune  qu('l(|uo  nvortiHSoiiiciit,  comino  le  baron  Louis  on 
181  t.  liO  b;in>n  do  S;iint-Cric(i  lui-niGme,  duns  IV'Xposd  dcs  mo- 
tifs do  la  loi  du  '28  avril,  181  (),  H'dtait  exprinio  avec  iMuuicoup  do 
niosurc  :  "  Nona  aurioiis  nioins  do  progres  t\  fairo,"  diHait-il, "  si 
uno  trop  lonj^uo  iulcrniption  dans  nus  relations  conunercialcs 
u'cilt  cunstitu<)  uno  pnjliibition  ii  I'abri  do  bKiucllo  on  a  pu  \\6.- 
filijroi',  sans  danj^or,  dos  nioyons  do  porfoctionin.'nu'nt  qu'uno 
licurcuso  rivalitd  n'auiait  pas  mamiuo  kW.  drvoloppor."  .  .  . 
Tour  adniottro  cctto  rivalitd,  "  nous  avons  du,"  ajoutait-il,  "at- 
tondroquo  Ics  temps  ct  los  )»roj^rc8  d'uno  opinion  (pii  sY-clairc 
tons  k'H  jours  davanta^'o  aiout  rdsolu  cotto  >;rando  (lucstion." 
Malliourousoniont,  c'otait  liors  du  palais  llourhon  (pio  los 
lumic'ros  so  i'aisaiout  i)eu  a  pcu  ;  dans  rAss('ml)loo,  ri'\<^no- 
ment  prouva  quo  d'ordinairo  los  inlorots  s'obstiiKMit  et  no 
s'oclairont  pas.  Ainsi  Ic  vout  la  naturo  liumainc.  Ouvrc/  la 
porto  du  privileuio,  la  foulo  s'v  procipitora,  et  on  s'y  ('■touflora 
bion  longlemps  avant  do  conqtrendro  (pio  Ton  out  ett'  plus  )\ 
I'aiso  en  picin  air  (piodansuno  onoointo  r(jsorveo,  mais  oii  tout 
Ic  monde  a  voulu  entrcr. 

Cot  oncombromont  finissalt  i>ar  dcvcnir  j^r'nant  pour  los  j)ro- 
tcotionnisfcs  oux-niemes,  (jui  ^-taiont  ol)li<i(.'s  do  rudoyor  lea 
trop  nonibroux  prcUondants,  et  d'iuvoquor  contro  oux  la  tli(3- 
orie  (in  saint  puidic.  "No  sait-on  pas,"  disaient-ils,  "  (pio  Ics 
societes  no  subsistent  ct  no  prosperent  quo  par  les  sacrifices 
individuels  ?"  '  lis  vantaieiit,  ct  avcc  raison,  la  proHp(5ritd 
indiistricllo  do  la  France  sous  lo  governement  des  I5ourl)ons  ;2 
mais  e'etait  i\  tort  (pi'ils  en  rapportaii'ut  riiuiineur  aux  taxes 
proiiiliitives.  lis  ne  comprciiaiont  pas  que,  sous  do  bonnes 
comiiu?  sous  do  mauvaiscs  lois,  uno  sooiote  pout  so  dev(;lop]icr, 
(pnmd  elle  a  en  ellc  dc  puissantes  causes  do  vitality,  ot  qu'cn 
pareil  casjes  deltiils  do  radministration  (pi'il  no  faut  pourlaiit 
jniiiais  dedaigner,  facilitent  on  retardeiit  le  progres,  mais  sans 
l\'toiiff('r.  Or  la  France  du  dix-neiivieme  sieelo  (5tait  animi^o 
p!ir  deux  principes  sup^^rieurs  qui  la  faisaient  alors  grandir, 
malgr<!  les  obtaclos :  la  science  ct  la  liljcrtd. 

1  IJnppnrt  do  M.  Foiiqiiipr-LonK,  Mimili'ur  do  IHlfl,  p.  400. 

•  Sous  HI'S  roig  K'nitiiiii's,  I'c  liciiu  royauiiio  jouit  de  tons  los  Iiionfiiits  do  la 
p;iix  ;  cliaquc  jour  sos  rioliosscs  s'accroissont,  la  grnnde  ninsso  do  lu  population 
lu8  partuge,  Ic  uercio  des  jouissances  individuellos  s'etond.  —  Ibidem. 


LA   POLITIQUE  DE  LA    RESTAURATION. 


1G5 


A  rext^irieiir,  le  systi^mo  proliibitif  deviiit  iK^ocssaircment 
amcnor,  coinmo  fl  I'dpociuc  do  la  lutto  do  Oolbort  contrc  1p3 
lloUiindais,  dus  nK^cunfi'iitcmoutH,  ct  pui'  suitf  dus  irprosaillcs 
ct,  di'S  capitulations.  Fia  ili'.stauratii)n  ct'da  traliord  dovaiit  lea 
lupiKU'cs  dcs  K<ats-Uni8,  I't  sigua  la  cuuvcntion  do  18:22,  (pii 
^tablissait  ciitro  los  deux  marines  lo  principo  do  la  rocipro- 
citt! ; '  puis  cllo  c(1da  devant  rAnf,doterrt',-  et  bicntot  ellc 
traita  sur  pied  dY;^nili(<;   avec  les  Klats-Unis.^ 

Lt'  spectacle  do  la  ricliosso  croissaiito,  non-soidonicnt  on 
Franco,  niais  dans  la  plupart  dos  Etats  do  rHuropo,  oil  la 
paix  favorisait  rosaor  des  entrcprisos,  avait  pourtant  8tinud($ 
les  dtudos  d'<!cononiio  politique.  L'Anf^lotorro  conimentjait  it. 
fixer  son  attculion  sur  lo  sort  de  classes  lal)oricusos,  ct  llus- 
Ivisson  vouaitdo  la  fairo  rdsohunent  cntror  dana  les  voies  do  la 
libort^i  conunercialo.  L'Allcma<i;nc  (^coiitait  la  voix  do  List 
proclaniajit  les  bionfaits  d'unc  union  douaniore,  et  organisait 
lo  Zollvoroin. 

La  France,  qtil  avait  cu,  an  dix-huitiomc  siiiclo,  lo  m<;rito 
do  poser  avoc  Quosnay  los  prouiiors  fondonionls  do  la  science 
<5cononii(pio,  la  retrouvait  transt'orni(jo  par  Adam  Sniitli,  et  on 
rasseniblait,  avec  J.  H.  Say,  lea  ('domonts  on  un  corps  do  doc- 
trine niotliodi(iuo.  Lo  TraitS  d" Efonomh'  J'(tlltit/ne,  publid 
pour  la  |)i'oniiore  fois  sous  lo  Consulat,  romanio  ct  ani('lior<5 
dans  chacuno  dos  (iditionssuccossivcs,'  ropnndait  do  justos  idecs 
sur  les  lois  do  la  production  ct  de  la  distribution  dos  richcasos, 

1  "Art.  1.  Ia'8  produito  nntiiri'U  nu  iniinufacturi'g  dps  fttnts-Unis  iinportt's 
en  France  siir  biUiincnts  iles  f*]tat8-Uiii8,  piiyeront  un  ilroit  adilitionci  qui  n'cx- 
t'l'ilcni  pii.s  20  fr.  par  tonnenu  do  ninrcliandiscs,  en  sus  des  droits  payrs  sur  les 
niL'nK'3  produits  naturcia  ou  inaniifacturi's  des  fttats-Unis,  quand  iis  sont  ini- 
portc's  par  navires  franc.ais.  —  Art.  2.  Lea  produits  natureU  ou  nuuiufactures 
de  France,  iniportes  aux  Ktats-Unis  sur  batinients  frani.ais,  payeront  nn  droit 
iidditionnel  qui  n'excedcra  pas  3  dollars  75  cents  par  tonnoau  de  niarcliandi.xc, 
eii  SU8  des  droits  paye's  sur  los  niC-nies  produits  naturels  ou  inanufactun's  do 
France,  quand  ils  sont  inijiortes  par  navires  des  fitats-l'nis."  —  (Convention  do 
navigation  et  de  coinniorce  conclue  entrc  la  France  ot  les  Ktats-Unis  le  24  juin 
1^22. 

■•^  Traito'  de  navig.  avec  I'Anpletorrc,  du  8  fdvrier,  182G. 

'  Traito  do  comni.  ot  do  navig.  du  7  juin,  18'J(5. 

*  La  premiere  c'dition  est  de  1803.  Quatrc  autrcs  editions  ont  etc'  publie'es, 
it  un  grand  nombre  d'excmplaircs,  pendant  la  Rcstauration,  en  1811,  1817,  1819, 
et  1820. 


flH 


iiT 


IK 

'It 


I 


1   !' 


<   t 


166 


ECONOMIC  HISTORY. 


ct  rautour  les  avait  lui-mL.  le,  dci)ui8  1819,  propag<?c8  au  Con- 
BiTvatoiro  des  arts  ct  m<5tier8  dans  renseignemcnt  dont  I'avait 
charge  le  cumto  Dccazcs.^ 

Non-seulomcnt  il  montrait,  commc  Adam  Smitli,  la  source 
des  riclicsscs  dans  Ic  travail ;  niais  Ic  premier  i)ar  une  thdorie 
neuve  "^  aulunt  que  simple,  il  faisait  apercevoir  les  liens  do 
solidarity  »pii  miissent  les  diffdrentes  industries  et  dans  une 
mumc  nation  et  entre  des  nations  diverses.  "De  toute 
nianifire,"  di.sait-il  avcc  la  rectitude  du  bons  sens,  "I'acliat 
d'un  produit  ne  peut  etre  fait  qu'avec  la  valeur  d'un  autre. — 
La  ])remierc  conseijuence  tjn'on  peut  tirer  de  cette  importantc 
vevitd,  c'est  (jue,  dans  tout  Ktat,  i)lus  les  producteurs  sont 
nombreux  et  les  prodiiits  multiplies,  et  plus  les  deboueh<js  s"  it 
iaciles,  varies,  et  vaafesi  —  Une  seconde  cons(5queu(;o  du  memo 
principe,  t'est  que  cbacun  est  iiitdresai?  a  la  prosp^ritd  de  tons, 
et  que  la  prospdritd  d'un  genre  d'industric  est  f'.ivorubie  (\  la 
prospdritd  de  t  tus  les  autres.  —  Une  troisienie  consequence 
de  cc  j)rincipc  ^'eeoud,  c'est  que  rimportation  des  jjroduits 
efrangers  est  favorable  h.  la  vento  des  produits  indigenes ; 
ear  nous  ne  pouvons  aclutor  les  marcliandises  dtrangeres 
([u'avec  (les  produits  de  notre  Industrie,  de  nos  terres  et 
de  nos  eapitaux,  auxquels  ce  commerce,  par  consdtjuent, 
procure  un  ddbouclid."  ^ 

Ces  principes  dtaient  bien  diffdrents  de  ceux  qii'on  pro- 
fcssait  k  la  Cliambrc  des  Ddputds.  lis  eonstituaient  un 
remarquable  jjrogres  dans  la  manierc  non-seulement  de  com- 
prendre  les  questions  commerciales,  mais  d'euvisager  la 
|)olitique  tout  cntiere.  L'opposition  api)arente  des  intdrets 
avait  rendu  nationale  la  liaiue  de  I'dtranger  et  i)lacd  les 
pcuples  vis-iVvis  les  uns  des  autres  dans  un  dtat  permanetit 
il'Iiostilitd  secrete  ou  avoude ;  les  sages  eux-mrmes  le  pro- 
I'lamaient.  "Telle  est  la  co!ulition  humaine,"  dcrivait  Vol- 
taire, "<iue  souhaiter  la  grandeur  de  son  pays,  c'est  souliaiter 
(lu  mal  c\  ses  voisins.  ...    11  est  clair  qu'un  pays  ne  peut 

'  I'librn!  80118  lo  titro  (le  Cours  romplet  d'liconomie  polillijHf.  pratique, 
■^  Autiiiit  (1111'  pcuvi'iit  Otrc  nouvi's  les  oljcrviitions  du  bons  sens.     Un  (logo 
lie  Vcnise  pariait  au  (luin^ioine  siecle  conimo  .7.  H.  Say  au  dix-neuviome.     Voir 
la  lei.'on  d'ouvorturo  de  M.  Bnndrillart  au  Collc-ge  de  France,  annc'u  1800. 
"•  I'raiti d'Ecoiwmie  jmliliijue,  «5ditiun  de  1841,  pp.  141,  144.  145. 


LA   POLITIQUE  DE  LA   RESTAURATION. 


167 


Un  doge 
Voir 


•jagucr  sans  qn'im  autre  pcrdc."  *  Do  cctte  o]vniou  ddrivait 
naturellonient  la  balance  du  coiumercc  et  I'esprit  du  systeme 
proliibiiif.  La  thdoric  des  ddbouclxjs  do  J.  B.  Say  ouvrait  un 
horizon  bien  autrcinent  largo  an  commerce  et  a  la  ijlnlo80|)hie 
politiiiue.  Mais,  qnoique  produitc  k  la  tribune,  avec  bcaucoup 
do  r<i8erve,  par  quclques  orateurs  do  la  gauche,  olio  no  pouvait 
avoir  I'agremcnt  do  la  majoritd  :  Ics  int<irets  cohiprennent  dif- 
licilcmcnt  les  theories  qui  les  genent. 

Cependant  le  ministerc  Villele,  devant  I'liostilit*?  manifcste 
de  la  bourgeoisie  parisienne,  avait  fait  appel  a  I'opinion  do  la 
r'rancc;  les  elections  lui  avaient  6i&  contraircs,  et  il  s'etait 
retird  pour  fairc  place  au  cabinet  le  plus  liberal  qui  ait  dirig<i 
les  affaires  sous  la  Restauration.  !Martignac  crda  un  ministere 
du  commerce  et  y  appela  le  baron  do  Saint-Cricq.  C'dtait 
le  moment  do  tenter  une  reforme  ;  la  gauche  appuyait  lo 
cabinet,  et,  dans  son  adresse,  la  Chambro  proclama  "  que 
Ic  premier  bcsoin  de  I'industrie  et  du  commerce  dtait  la 
liberte."  Unc  commission  d'enquete  fnt  nommde  par  le 
gouvcrnement  en  1828.2  La  conclusion,  qui  dtait  loin  de 
donner  jtleine  satisfaction  an  vaMi  do  I'adresse,  fut  que 
"  dans  I't'tat  de  I'industrie  en  Franco  en  presence  des  intdrets 
(|ui  s'y  trouvent  engagds,  on  doit  s'en  tenir  <\  un  systeme  rai- 
sonnc  de  ))rotection,  c'est-a-dire,  d'uno  part,  protdger  elllcace- 
ment  le  travail  du  pays,  et  do  I'autre,  dtudier  soignewsemoni:, 
pour  chacpie  industrie,  la  (piotite  de  la  protection  necessaire 
en  i)rdsence  des  dommagcs  (pie  ])ouvait  order  une  protection 
excessive."''  Le  baron  do  Saint-Cricq  pouvait,  comme  tout 
I'ailiniuistration,  Taccoptor  sans  n  noncer  a  ses  [)ropros  iddos  : 
il  dc'elara  a  la  tribune  avoir  toujours  pensii  et  i)rofessi'  «iu'il 
ne  fallait  "ni  tout  permettro  ni  tout  iuterdire,"  et  quo,  pourvu 
qii'on  admit  lo  principc  de  la  protection,  il  admettait  tres-bion, 
do  son  cotd,  la  controverse  sur  la  limite  k  fixer.  Or,  le  proict 
qu'il  prdscnta,  sans  changer  I'esprit  des  tarifs,  adoucissait  les 

'  Voltuiri',  Dirt,  philos.,  v"  partie. 

-  II  y  out  (los  coin miss.i ires  dans  la  plupart  dps  grandcs  villes  ot  pour  les 
uraiules  industries.     Voir,  posaim,  lo  Monilrnr  do  1828. 

^  Miinitfur  do  1R2!>,  p.  810.  K.xposc'  dos  motifs  par  le  baron  de  iSnint-Crioq. 
Cependant  deux  onqiiGtes  Roulemoiit  furent  faiti  *  niotliodiqueniont  it  publlees. 
L'Enquete  sur  les  fefs,  1828,  1  vol.  in-4,  et  I'Emjiiete  sur  les  sucres,  1828,  1  vol.  in-4. 


■»•• 


108 


ECONOMIC  HISTORY. 


I  , 


\i:' 


',  T 


11  i  f 


taxes  (Ic  certains  produits  oxotiques,  et  annon^ait  que,  cinq  ans 
apres  la  publication  do  la  lo',  lo  droit  sur  les  fers  serait  di- 
niinu<3  d'un  ciniiuieine.  C'dtait  un  commcnconicnt  di;  rdformc 
qui,  par  son  extreme  niodenition,  avait  I'avantii^o  dc  no  pas 
froissor  trop  rudement  los  intt^rots,  ot  la  chiinoo  d'etre  adojitij. 
II  nc  fut  pas  nienic  discut<3.  Lo  ministero  Martit^nac  toniha, 
ct  son  succcssour  so  garda  bion  de  rcprcndro  un  projet  dcs- 
agrdable  i\  la  droite. 

Lc  systenio  pruhiliitif  qui  caract(^riso  la  Idirislation  douaniere 
de  la  Restaurationdonioura  intact.  Constitu*?  par  los  lolsdo  1810 
ct  dc  1821  pour  U'S  cereales,  par  Ics  lois  do  181(1,  do  1817,  do 
1818,  dc  1820,  dc  1822,  ot  do  1820  ])0ur  los  produits  de  I'agri- 
culturc  et  dos  grandes  fabri(iueK,  11  s'etait  propose:  coninie  but 
do  r<:^scrver  aux  seals  productours  fran^ais  le  marclid  francais. 
But  bien  diHioilc  h  attoindro  dans  un  dtat  de  civilisation  oil 
los  rapports  dos  pcuplos  .out  si  fr^^ipuMits;  impossildo  ot  il- 
logiquc,  dos  qu'on  avait  on  luoiuc  tonips  la  protontinndc  favor- 
ioor  et  dY'tondro  le  comniorco  oxtoriour.  Pour  roussir,  sans 
commettre  do  trop  grandos  injustices,  il  aurait  fallu  ])Ouvoir 
isolor  la  France  commo  le  Japon  s'est  longtenips  isol<j  au 
milieu  do  TOcean;  lo  travail  qu'on  so  plaisait  a  appeliir  na- 
tional aurait  scul  pourvu,  taut  bion  quo  nuil,  aux  besoins  dos 
nationaux,  et  tons  auraiont  subi  la  condition  oonimunc.  Mais 
des  cpie  la  l»arrierc  nc  c'elevait  que  j)0ur  (iuol(|Ucs-un8,  il  y 
avait  necessairomont  un  \  •iviloge  en  faveiu'  do  coux,  (pu-ls 
qu'ils  fussent,  (pii  avaiont  ie  droit,  conuno  prodiu'tours,  d"im- 
poscr  lours  nuireliaudisos  a  lours  eonoitoyens  ot  le  droit, 
commo  consomuiateurs.  do  clioisir  entn;  los  marchaudisos  do 
lours  concitoyens  et  cellos  dos  dtrangors.  II  devait  y  avttir, 
par  suite,  uno  ardonto  competition  pour  '"trc  adinis  a  la 
JDuissance  do  co  privilege. 

Pour  assuror  a  rinteriour  roxecution  des  lois  proliiiiitivos, 
il  fallut  dtendrc  encore  i\  do  nouvoaux  objets  la  surveillance 
administrative,  —  ordonner,  par  oxomplo,  que  les  tissus  ot 
tricots  do  la  natiire  de  coux  qui  dtaient  proliibes  no  fussent 
mis  en  vcnto  tiu'avec  uno  marque  particuliero,'  jjrescrirc  le 

J  Ord.  dc8  8-11  aoftt,  1810. 


LA    POLITIQUE  DE  LA   RESTAURATION. 


1G9 


mode  lie  lU'vidage  ct  (reiivelopiio  do  cotoiis  lilc^s  cu  France,' 
fiVM'c  dc  visiles  doiuiciliaires,  Haisir  les  inarcliandises  suspcetes, 
exciter  des  nidcontenteiuents  ct  des  roclaiuations.'*  Un  luul 
CDiidiiisait  a  un  autre  nial. 

11  taut  i!  i<',  pour  niieux  fairo  comprcndre  les  eauses  do  la 
politiipio  curuuicroialo  en  France,  quo  dans  touto  i'Kuropo  le 
vent  (;tait  alors  a  la  protection.  Apres  les  rudos  secousses  dc 
TKnipiro,  les  nationalites  s'etant  reconstitn(^es,  les  gouvernc- 
nients  avaient  favorise  dans  uno  eertainc  liniito  cette  tendance 
ipii  seniblait  assiu'er  lour  independanoo  politi<iue,  et  eliarun 
s'etait  i^arde  d'autant  plus  do  ses  voisins  (pie  les  eveuenients 
raviiit,  (pielipio  temps  aujtaravant,  lie  plus  etroitement  i\  eux. 
Partout  on  avait  repoussd  les  produits  (Strangers,  et  [larti- 
culieronient  les  produits  anglais,  dout  I'introduction  a  bas 
prix  avait  fort  dt'coiu'erte  les  nianufacturiers  du  continent. 
La  France,  il  est  viai,  avait  donne  rexeniplo  aux  <'ays-l>as, 
\i  rAlleinagne,  .1  I'Espagne ;  niais  ceux-ci  s'etaient  empresses 
dc  le  suivre,  ct  parfois  Tavaient  d<^passe.  L'Angleterrc  elle- 
mnne  ('•taii  .i-.ro,  jus(iu'en  1821,  lierissee  do  prohibitions, 
(pi'clle  ava.  i.  :nic  aggravecs  au  profit  dc  ses  proprietaircs 
louciers. 

La  protection  etait  au  p(»nvoir  en  Fiin-opc.  Toutefoia  I't'co- 
nomic  politique,  patronnc  de  la  liberte  commercialo,  lui  livrait 
deja  dc  rudcs  combats  dans  Ic  domaine  do  la  science;  elle  tri- 
oiMpliait  dans  le  doiuiiine  des  fails;  ello  dniuiait  Iluskisson 
a  rAngleterre  et  en  France  ello  ('iimmont;ait  ii  miner,  avec  Ic 
doul)lo  argument  dc  la  consommation  et  (jos  debouclies,  la 
forteressc  elevdo  par  des  interets  prives  et  soutenuc  par  des 
pri'juges  :  mais  la  forteressc  dtait  dncrgiipiement  defenduc. 

'  Loi  du  21  nvril,  1818;  Ini  <lu  20  mal.  1810;  or.l.  ilii  1(1  jiiiii,  1810;  <lo8  1-ir, 
iK'.'.  IHII);  .les  8-24  ,'>vril,  Is-.'O. 

-  !'r>ii;iiit  en  eoncidiTiitioii  Ioh  rcpn'scntiitions  ndrpMi't'g  ilc  lii  [lart  d'nii 
Kriiiid  iioiiilire  do  ninniifHcturicni  I't  di'  timrchands  ilc  homiotfrio,  Hoit  sur  I'insiif- 
li^aiifi',  I'll  ci'  qui  li'g  cnncornc,  des  di'lnis  prt'cc'dumnicnt  nccordi's,  soil  mir  U'S 
dillli'iiltfn  (|iii  s'Dpposi'iit  il  (•(■  line  la  marqui'  puissc  rlrc  sc'pan'riipnt  n()pliiiiu'e  & 
cliucun  Jtu  objcts  iirovunuut  du  luur  iiiduKlrie.  —  Old.  dt-b  2^-iiO  supt.  1818. 


^     % 


"•P 


III  • 
•I  ' 


J  J 

I         ■«     ,  !  • 


170 


ECOSOMIC  HISTORY. 


VIII. 


THE  ZOLLVEREIN. 


t 


if 


M 


^: 


h 


From  Bowuing's   Repokt  on  the   Puussian  Commeuciai.  Union, 
Tarl.  Doc.  1810,  Vol.  XXI.  i-i-.  1-17. 

IN  compliance  with  tlie  instructions  whirh  I  had  the  honor 
to  receive  from  your  lordship,  dated  Foreign  OITice,  July 
14,  1830,  I  i)roceed  to  re|)ort  on  the  progress,  ])r('sent  state, 
and  future  ])rospccts  of  the  Prussian  (>ommercia)  League. 

No  doubt  this  great  Union,  which  is  ivuown  in  (icrmany  by 
the  name  of  the  ZoUverein,  or  Zollvrrbande  (Toll  Associa- 
tion or  Alliance),  derived  its  lirst  and  strongest  influence  from 
a  desire  to  get  rid  of  those  barriers  t'»  interconimunication 
which  the  sejiaraic  fiscal  legislation  of  the  various  States  of 
(Jerniany  raised  among  a  ]ieople  whom  natu.al  and  national 
feelings,  as  well  as  common  interests,  would  otherwise  have 
connected  more  intimately  and  ])ermanenlly  together. 

The  ZoUverein  represents,  in  Ciermauy,  the  operation  of 
the  same  o])inions  ar.d  tendenci<>s  which  have  already  elTected 
so  many  changes  in  the  comniereial  legislation  of  other  coun- 
tries. In  the  United  Kingdom  the  custom-house  laws  which 
separated  Scotland  an<l  Irehmd  from  Eagland  have  been 
superseded  l»y  a  general  system  applicable  to  the  whole.  In 
France  the  local  lyarriers  and  the  local  laritTs  have  given  way 
to  a  general  and  uniform  system  of  taxation.  Even  before 
the  Commercial  League  associated  so  many  States  in  a  com- 
mon union,  several  less  extensive  combinations  had  prepared 
the  way  fo"  a  more  diffusive  intercour.se.  Between  the  States 
which  do  not  form  part  of  the  Prussian  Lengue  —  as,  for 
example,  between  Hanover  ami  Ihunswick  and  Oldenbtn-gh, — 
the  sauic  tariffs  have  been  adopted,  and  the  payment  of  duties 


THE  ZOT.T.VEREIN. 


171 


in  one  of  the  States  is  sufficient  to  secure  free  sale  or  transit 
in  t'  e  other. 

The  Commercial  League  is,  in  fact,  the  substantial  repre- 
sentative of  a  sentiment  widely,  if  not  universally,  spread  in 
(Jernuiny,  —  that  of  national  unity.  It  has  done  wonders  in 
breaking  down  petty  and  local  prejudices,  and  has  become 
a  foundaliim  on  which  future  legislation,  representing  the 
common  interests  of  the  German  people,  may  undoubtedly  be 
hereafter  raised.  If  well  directed  in  its  fuLure  operation,  the 
Zollvereiu  will  represent  the  fusion  of  German  interests  in 
one  great  alliance.  The  j)eril  to  its  beneficial  results  will 
grow  out  of  the  efforts  which  will  Ijc  made,  and  which  are 
already  made,  to  give  by  protections  and  prohibitions  an  undue 
weight  to  the  smaller  and  sinister  interests  of  the  Verein.  Uut 
if  its  tariffs  l)e  so  moderate  and  so  judicious  as  to  allow  full 
play  to  the  interests  of  the  consumers  in  the  field  of  competi- 
tion ;  if  there  should  be  no  forcing  of  capital  into  regions  of 
imprc'.luctiveness  or  of  less  productiveness;  if  the  claims  of 
manufacturers  to  sacrifices  in  their  favor  from  the  community 
at  large  be  rejected  ;  if  the  great  agricultural  interests  of  Ger- 
many recover  that  portion  of  attention  from  the  commercial 
union  to  which  they  are  justly  entitled;  if  the  importance  of 
foreign  trade  and  navigation  be  duly  estimated,  —  the  Zoll- 
vereiu will  have  the  liai)picst  influence  on  the  general  prosper- 
ity. And  that  the  League  has  been  much  strengthened  l)y  the 
experience  of  its  benefits;  that  its  popularity  is  extending; 
that  its  further  spreading  may  In;  confidently  auticijiated, 
—  appears  to  be  indubitable.  In  fact,  the  Zollvercin  has 
l)rought  tiie  sentiment  of  Gcrmnn  nntiouality  out  of  the 
regions  of  hope  and  fancy  into  tli..se  of  positive  and  materinl 
interests;  and  representing,  as  it  do(>s.  tln'  jxipuliir  feoling  nf 
Germany,  it  may  l)ecome,  under  enlightened  irMidance,  an 
instrument  not  only  for  promoting  the  pejirf  anil  prosperity 
of  the  States  that  compose  it,  but  of  extending  their  friendly 
relations  th'-ongh  the  world. 

Coi'.siderations  both  of  morality  aod  eeonomy  wero  not 
wanting  to  recommend  the  Commercial  Cuion  t<»  the  Gorman 
[)eoplc.     Not  only  were  the  numerous  kirriers  and  various 


m 

■'ill 


■5 


1 


jj* 


172 


ECONOMIC  HISTORY. 


legislation  of  the  German  States  groat  impodiincnts  to  frado, 
but  they  created  a  considerable  anioiuit  of  contraband  tralTic, 
and  caused  the  country  to  swarm  willi  petty  snnigglers,  who 
lived  upon  the  profits  which  the  varieties  of  the  tarirts  placed 
within  their  reach.  Tlie  custom-house  achninistratidu  was 
costly,  ifud  generally  ineflicicnt,  from  the  extent  of  froiitii-r 
to  be  guarded;  so  that  the  estal>lishmcnt  of  one  large,  instead 
of  a  variety  of  small  circles,  has  led  at  the  same  time  to  a 
great  diminution  of  cost  and  a  great  increase  of  eilicieney, 
while  it  has  rcmoveil  fi'om  all  the  intei-ior  of  Cermany  that 
demoralizing  inliuence  which  the  presence  of  multitudes  of 
illicit  traders  and  smugglers  always  brings  with  it. 

The  Zollverein  was  not,  as  it  has  been  often  asserted  to  be, 
a  union  formed  in  hostility  to  the  connneroial  interests  of 
other  States  ;  it  was  not  intended  ])n'iniitiirely  to  create  a 
manufacturing  jiopulation  in  rivalry  with  or  opposition  to  tho 
manufacturing  aptitudes  of  fJreat  J>ritain ;  it  was  by  no 
means  the  purpose  of  its  founders  to  misdirect  capital  to 
unprolitable  employment,  to  saerilice  agriculture  to  trade, 
or  to  encourage  less  the  field  than  the  factory.  The  Zoll- 
verein was  the  substantial  expression  and  effect  of  a  general 
desire  among  a  great  nation,  split  into  many  small  States, 
but  still  of  common  origin,  similar  manners,  speaking  the 
8am(>  language,  educated  in  the  same  spirit,  to  communicate, 
to  trade,  to  travel,  without  the  annoyance  and  impediments 
which  the  separate  fiscal  regulations  of  every  one  of  their 
governments  threw  in  the  way.  If,  in  the  natural  process  of 
things,  th(^  tarilVs  of  the  Zollverein  have  become  hostile  to 
tho  importation  of  foreign,  and  especially  of  Hritish  produce, 
it  is  Iteeause  (Hir  laws  have  prevented  the  greater  extension  of 
conunereial  relations  with  (iermany.  We  have  rejected  the 
payments  they  liave  olVered  ;  we  hav<>  foiccd  them  to  manu- 
facture what  they  were  unable  to  buy;  and  we  have  put  in 
their  hands  the  means  of  manufacturing  cheaply,  by  refusing 
to  take  the  siiiplus  of  their  agiieultural  produce,  the  non-ex- 
portation of  which  has  ke]it  their  markets  so  low  that  small 
wag(>s  have  been  sulTicient  to  give  great  comforts  to  their 
laborers. 


i 


THE  ZOLLVEREIN. 


173 


Tlicre  can  be  no  doubt  tbat  the  bostilc  tariffs  of  other 
nations,  and  ospecially  the  corn  and  timber  hiws  of  (ireat 
Britain,  served  j^reatly  to  strengthen  the  arj,mnu'nts  in  favor 
of  conuncrcial  uni(Mi.  It  was  felt  necessary  to  extend  the 
homo  market  while  foreign  markets  were  closed,  or  only 
partially  and  irregularly  opened,  to  the  leading  articles  of 
IJernian  production. 

"  We  should  iu)t  liave  complained,"  says  a  distinguished 
(icrman  writer,  in  18:5'),  "  that  all  our  markets  were  overllow- 
ing  with  Kngli.sh  manufactures,  —  that  (iermany  received  in 
liritish  cotton  goods  alone  more  than  the  huiulred  millions 
of  Hritish  suitjects  in  tlu!  Kast  Indies,  —  had  not  Kngland, 
while  she  was  inundating  us  with  Iwr  productions,  insisted  on 
closing  her  markets  to  onrs,  Mr.  Robinson's  Resolutions  in 
181.")  had,  in  fact,  excbided  our  corn  from  the  ))orts  of  Great 
IJritain;  she  told  us  we  were  to  l)uy,  but  not  to  sell.  Wo 
were  not  willing  to  adopt  reprisal*^ ;  wo  vainly  hoped  that 
a  sense  of  her  own  interest  would  lead  to  reciprocity.  IJut 
wo  were  di.sa|»pointed,  and  wo  were  compelled  to  take  care  of 


ou;'S(dves."  ^ 


Thus,  while  on  the  one  hand,  the  Zollvorein  was  iidvo- 
cated  as  a  measure  of  self-defence  against  the  hostile  legis- 
lation of  foreign  nations,  it  should  not  be  forgotten  that,  as 
respects  the  confederated  States,  it  represented  the  priiuiiples 
of  unrestricted  inten'omniunication. 

As  between  more  than  twenty-six  millions  of  riermnns,  it 
was  the  estal)lisliment  o(  free  trtvh'  ;  restrictions,  duties,  pro- 
hiliitions,  custom-houses,  there  are  none,  as  far  as  regards  the 
various  States  that  comprise  the  Commercial  I'nion.  What- 
ever impe(liments  \\w  tiirilTs  create  to  conniiereial  eonimuni- 
Ciition  with  foreign  lands,  tin'  League  has  thrown  down  every 
bari'ier  which  stood  in  the  way  of  trading  intercourse  Ix'tween 
tlii>  diil'erent  branches  oi  tlie  great  (ferui:  ii  family,  which  the 
League  represents.  And,  as  the  conception  of  the  League  was 
popular  and  national,  .?o  it  cannot  be  denied  that  its  workings 
have  been,  on  the  u'hoh\  favorable  to  the  prosperity  and  to  the 

i  Kankc'g  "  Ilistoriscli-pulitische  Zcitsuhrift." 


I, 

<►,■' 


It 


I 

■  '1 


mi: 

!  1  ^:* .. 

i,  1- 

.  -  :S 

J 


I 


;,'  I 


h 


iy 


174 


ECOSOMIC  IIISTOUY. 


hnp|iiiu'8a  of  (he  fJonnnn  coniniiinity.  Tiiiiffs  less  iKwtilo  to 
tli(.'  maiiul'ucturc'H  and  luit'i;,n»  cttmincrcc  (tf  natioiiH  would,  hh 
1  conceive,  have  K''*'»*b'  "ddid  to  the  liuni'licial  cITccts  ol"  the 
Union.  Its  morn  extended  connnunicatiuns  with  other  coun- 
tries woidd  have  given  jrreater  energy,  and  opened  a  wiilcr 
licld  to  the  increased  acli\ily  of  the  hi)nic  tiaih'.  There  is  nn 
reason  wliy  foreign  eununeree  slumltl  noi  have  heen  iteneliti  d 
to  the  same  or  even  a  ^vider  extent  liian  internal  inihistry, 
hy  the  overthrow  of  that  hteal  h'gishilion  which  impeded  in- 
tercourse, and  liy  the  introihiction  of  a  uniform  nnd  Uheral 
system  of  custom-house  h-gislation. 

'l"he  ZoUvereiu  now  represents  the  interests  (well  or  ill 
understood)  of  njore  than  twenty-six  uiillions  of  inhalfilants 
of  the  most  civilized  and  opuli'iit  pa' Is  (if  Europe,  and  has 
accomplisheil  one  important  nsult,  namely,  of  exeilintr  the 
attention  and  of  awakeuiu'/  the  appnlirusious  of  more  than 
one  neighlioriiig  nation.  What  the  Zollverein  is  to  iii'come 
may  dt'pend  as  nuieh  upon  others  as  upon  themselves;  and, 
should  its  course  he  guided  hy  enlightened  economy  and 
sound  commercial  policy,  it  may  hecome  an  instrument  of 
incalcidalile  and   houndlcss  good. 

liOtig  hefore  the  /olUereiii  came  into  o|>eration,  the  same 
sjiii-it  which  lc(l  to  its  formation  hail  heen  exhihited  in  various 
parts  of  (irrmany,  leacMng  to  sundry  local  and  even  naticjual 
rcfoi'ms  in  the  commercial  policy  of  the  (lernuin  States. 

Somi'  steps  had  heen  tiikcn  in  Prussia,  during  the  years 
lNl(!  and  ISlT,  liy  sundry  ordiusinccs  to  introduce  a  gi'neral 
anti  simple  system  of  eustom-hou.He  legislation,'  and  ou  the 
Utith  May,  1(SlS,  a  new  tariff  was  puhlished,  which  is,  in  fact, 
the  groim(hv(U-k  of  the  existing  airangements,  IJefore  this 
period  a  diri'ercnt  liscal  system  prevailcti  in  different  parts 
of  the  Prussian  kingdoiu.  The  imposts  in  Ihaudcnliiii'g 
amounted  to  •!'.•  grosclien  — 1».  17.  pei'  individual;  in  Silesia 
they  wcic  only  -J  groschen  —  'Ik.%1.  'J'he  new  law  allowed 
tlu>  unrestricted  circulation  of  all  foreign  products  which  had 

'  Sec  csppcinlly  tlio  onlinnnco  of  lltli  .fiinr,  1810  —  "Ziir  AiifluOiiiii);  iUt 
W.'issiT  lliniu'ii  uiul  I'rovin/iiilzolic  zuiiiielint  in  ili'ii  iilti'ii  rrovinzi'ii  dtr 
Muiiarcliiu." 


[Ifi; 
It" 


77//;  ZOLLVEllKIN. 


1(0 


rtncf  pjifisod  the  frontier,  nml  tlic  fico  trnnsit  of  all  liomo  |)ro- 
iliicliuiirt.  The  intention  of  this  lariiT  of  1M18  was  to  estaliliah 
10  per  cent  ns  \\w  niaxinuun  of  protection;  and,  liad  tlie 
intention  of  llic  I'liissians  l)een  carried  into  effect,  there 
wonid  have  been  no  ^ronnds  for  complaint. 

in  HiifakinL""  of  Ihi-  I'rnsHian  tarilV  to  the  House  of  Coni- 
mons,  on  the  7th  May,  IfSJT,  Mr.  Iliiskissun  statetl  "that,  liie 
duties  on  the  internal  consiniiption  of  Ihilish  jroods  are  what 
\V(!  should  consider  \ery  low  upon  most  artitdi's,  (hietuatin>; 
from  T)  to  10  per  cent  —  upon  no  one  article,  I  iielieve,  ex- 
cel'din  jr  1')  percent  ;"  luit  this  was  undoiilite(lly  an  incorrect 
view  of  tl.inLTs,  for  it  will  appear,  on  the  investiLTation  of  the 
matter,  thai  the  duties  on  many  articU's  of  Hritish  manufac- 
ture vary  from  liO  to  100  per  cent  upon  the  value;  and 
thouirh  no  doultt   the  duty  (hein^r  levied  on  the  weiirht)  has 


mueh   increased   in  n 


I     Villi 


n'liii   amount*   'incn 


IS' 


(,  It    was. 


even  then,  fiom  -0  lot'.o  percent  on  \  mius  low-priced  manu- 
factures; nor  was  Mr.  Iluskisson  warninted  in  sayin«r  that, 
"in  the  whole  I'russiau  tarifl',  there  is  not  a  sintilc  pmhihi- 
tion,"  inasmuch  as  imports  of  salt  and  phiyin^-cards  are 
wholly  prohiltited,  except  for  u^oveinmeiit  account. 

The  most  important  step  liy  which  eviilence  was  Lnven  of 
the  tendency  of  the  dilTerent  States  of  (Jermany  to  amalira- 
mate  tlii'ir  interests  and  to  estalilish,  instead  of  many  tarilTs, 
one  single  system,  was  the  union  of  IVivaria,  Wiirtemlierfr, 
II(ihen/.nllcrH-Si!_"'marinL''en,  and  Ifoheuznllcru-ireeMiuiren,  in 
the  ('(juimercial  leaiiiie  of  *2,Sth  duly,  IS^M.  Iladeii,  the  two 
llesses,   and    Saxony    were    aftcrwanls    invited    to    join    the 


I 


icajfue, 


The   LTovenimeiit    of    Prussia,   ali\c 


to   ll 


le    state   of 


pultlic  opinion,  h.ul  rnteictl  liy  various  treaties,  from  lsl!>  to 
Is. 50,  into  a  commercial  li'airue  with  (Irand  Hucil  Hesse, 
Lippe  Hetmold,  and  some  smaller  states,  and  in  l>eceml)er, 
18"Jtl,  the  cnrlai'i's  (such  portions  of  the  territory  as  are  sur- 
iiiundeil  liy  another  State)  of  .Mecklenliurjj-Sehwerin,  Uipen- 
llesseland,  Sch<enl»ertr,  Aidiall-Kothen.  .\nlialt-l)essau,  llesse- 
llomlturir,  and  other  Stales,  joined  the  Piiisso-Ilessiau  I'nion  ; 
wliile,  in  IS'.l,  Saxony,  Klectoral  Hesse,  Saxe  Weimar,  Saxc^ 
Meiningen,  Siuve  Cuburg,  Su.xc  Altenhiirg,  and  other  united 


I  .Ml  1 


■  c 


1 


2:? 


t,  ■  ■ 
■I '  ' 

'■J 


W     1 

i 

-I 


It,    f 

I'  I 


176 


ECONOMIC  HISTORY. 


tlu'inHclvos  to  tlio  Iliivuro-Wiirtciiilicrf;  Icdjjfuo.  Kiich  of  thcRC 
two  great  Ijnmchcs  niitiirally  Hoiijrht  to  extend  its  inlluenoe, 
imd  each  itie|tare(l  tlit;  way  for  a  fiiHion  of  tho  whole  hi  one 
great  association. 

On  the  2:i(l  March,  IS.'Jo,  a  treaty  was  conclmhMl  hetween 
Prussia,  IJavaria,  Wiirteniherii',  Kh'cforal  and  I)iical  Jlesse; 
on  the  80th  March  of  the  same  ycnr,  Saxony  joined  the  asso- 
eiution  ;  on  the  11th  of  May,  Aidialt  and  Dneal  Saxony  nnited 
themselves.  The  ralilications  wi.'re  exchauired  on  the  11th  of 
May.  This  treaty  is  the  hasis  of  th(!  Zollverein,  or  Coni- 
nieicial  licagiie.  It  will  l)e  fonnd  at  length  in  the  A|t|)endix 
I.  (l»arl.  I)(.e.  pj).  7.'5-78).  In  1835  IJailen  iniited  itself  to  the 
League,  and  Nassan  and  Fraidil'ort-"n-the-Maino  have  also 
heciinie  parlies. 

Th(>  lirst  Prusso-llessiiin  Union,  taking  the  name  of  tho 
I'rctisslxi-/i-ffi'ssl.'«'/iiii  Z'l/I  I'l  rli(iiidi\  comprising  many  smaller 
Slates,  such  as  ,\nhall  Dessau,  Anhalt  Neuherg,  Saxo  Coliurg 
fJollia,  Anhalt  Kolhen,  Schwarzlturg  Sondershauscn,  llcsse 
Ilomhurg,  Scliwar/lturg  Iludolstadt,  etc.,  represented,  accord- 
ing to  the  census  of  1831,  a  population  of  13,93(!,0S7  souls, 
and  contained  a  territory  of  r),"J78  s<piarc  (!erman  miles. 
In  18:'>o  it  had,  hy  the  nnit»n  of  Eleidoral  IIes.se  and  the 
increa.se  of  population,  nngmented  the  nundier  of  souls  to 
1 1.8-J7,418,  and  the  territory  to  r),4(I0  square  (Jerman  miles. 
The  States  of  Thuringia,  containing  altout  1>00,OU()  iidud)i- 
tants,  had  also  their  commercial  and  toll  union  before  they 
joined  the  Prussian  League  in  1833,  while  Havaria,  Wiirtem- 
herg,  Saxony,  and  Kaden,  brought  between  8  and  *J  millions 
of  i)opulation,  and  nearly  2/)00  square  German  miles  of  terri- 
tory into  the  confederation. 

The  following  tal)le  exhil)its  tho  population  of  the  States 
now  con>i)rising  tho  German  Cu.stom-hou.se  Union,  to  serve  as 
a  basis  for  the  Division  of  the  Receipts  at  Triennial  Periods : 


, 

ffii 

, 

^ 

/ 

1 

i 


niF.   ZOLLVEIIEIX. 


177 


10 


IK'iilltnnMoii  of  the  Mtnli-iiwlilili 
liitfi-  k'vi'Ii  tliiilr  iMout  lu 
tbulr  uwii  uam«. 


I'nmiiiii,  ntiil  tin-  Stiitc§ 
wliicli  liiivc  conic  tl> 
nil  ngrui'iiicnt  with 
luT 

nnviiri:i 

Saxony     

Wiirtcinlicru      .     .     .     . 

(iniTiil  Diicliy  of  liiuk'n. 

Klc<'tori»ic  of  llcs-tc  .     . 

(irniiil  Diicliy  of  llcsso . 

'riiiirin){inii  States     .     , 

Duuliy  of  Nassau  .     .     . 


Tolnl  for  Division 
Frankfort^  .     .    ,    , 


Total  for  Topulation . 


Kxtont  nf  t<ir- 
rlliirliil  mi- 
|wrfli'li-H  ill 
•i|Uun)  lulloa 


,157 
•  77 
271 

;wr> 

27'.i 
1M2 
17'.t 

Hi 


loa 


4.'a^ 


H.2W,'(Ai 


Kx trn t    of 

lIlH    ClllltOIII 

Ik'Uku    froii' 
llur  iu  mllui. 


I'npiilttinn  KAPonlInK  tn  til* 
I'lMiHiii  tiicrtt'il  iifHiii  nil 
till.'  iJliit  uf  iM^emlwr,  lu 


AV 

774,% 

I'rtO 

liil^ro 

llld 

6H 

iV« 

:»l'n"(, 

,^*<T 

flOiVfl 

1    <l 

l«.'o"<, 

IrVff 

t          •          •          > 

III 

MOT 

'          •          *          • 

1.064A»o 


IWM 


i«a7. 


i;i,mf2,8«i) 

■J.'-T)  1,118 

l,'.ll.'),(ltiH 
l,lL'7,122 
l,'-';17,tl.-.7 
1)40,(17  4 
7tl!Ml'.tl 
1K)K,17H 
y7.!,t)(il 


'-'fi,()'.t0,8n8 
60,0<»0 


26,160,81*8 


M,ni8,LV,() 

4,:!lli.«H7 

I,<ir>-j.ii4 

l,<lli7,".Mil 

1,-Ji'i4,f.l4 
r.;-.2,7tii 

7!ll,7;!(i 
lt.il. :f4() 
;J8;J,7:!0 


25,()»'.>  :!:i;i 
t;i),(NMi 

'2«>,042,88a 


The  Zolheroin  had  to  contend  witli  a  stroni;  oppDsition  in 
its  orif^in,  not  only  from  some  of  the  States  whose  hxMil  posi- 
tion forced  lh(>in  into  tlie  union,  hut  from  otiicr  (Jerman 
States  thai  eontiniu'd  indcpemh'nt,  for  Ihe  tariff  pi-essecl 
e(]ually  on  all,  not  parties  to  the  Lcairno,  \vh<'th<'r  neiuhliois 
or  foreiu;nei's.  The  I'nissian  tarilTs  of  ISlS  had  hreii  stronirly 
resisted  Ity  Hlectoral  Ifesse,  Cassel,  and  other  States.  Sax(my 
denounced  them  as  hostile,  nay,  fatal  to  hei-  niaiinfaetnrin<^ 
and  commercial  interests.  Yet  it  cannot  he  dcnieil  that  the 
tariffs  of  181H  were  a  j^reat  improvenu'iit  npon  the  previously 
existing;  leirislation,  for  they  replaced  multitudes  of  pruhihi- 
tions  and  prohihitory  duties  hy  moderate  imports.  Jn  1820 
the  qtiestion  of  a  union  Itetween  I'russia  and  Ife.sse  Darm- 
stadt was  disctissed,  and  an  in<|uii'y  was  made,  in  case  Ilesse 
Darmstadt  should  unite  with  IJavaiia  and  Wiirtcmlicrg, 
whether    Prussia  would   ho  willing  to  enteilain   the  suhject 

'  Tlie  population  of  Frankfort  Is  not  taken  into  the  Division  of  tiie  I{cvo- 
nues,  as  lliis  town  receives  an  inaiionalile  and  invariable  sum  calculated  on  the 
basis  of  a  population  of  OO.CKX)  souls  (Oo.OJiO). 

12 


r  m 


I 


m 


M 


..t 


IMAGE  EVALUATION 
TEST  TARGET  (MT-3) 


1.0 


I.I 


1.25 


IIIIIM 

IB 
IIIIM 

il:  ■•  0 


IIM 

2.0 


III™ 

U    III  1.6 


V] 


m 


'(5. 


a 


<?. 


C^    c>' 


A 


V 


/A 


Photographic 

Sciences 
Corporation 


23  WEST  MAIN  STREET 

WEBSTER,  N.Y.  14580 

(716)  872-4503 


\ 


;v 


% 


V 


4>^ 


\\ 


♦ 


6^ 


^,^ 


f^    <»^ 


C^^ 


fA 


6^ 


^- 


178 


ECONOMIC  HISTORY. 


'A* 


of  a  commercial  treaty.  The  first  answer  of  Prussia  was 
unfavorable,  but  the  difficulties  were  at  last  surmounted,  and 
the  League  before  referred  to  was  formed  between  Prussia 
and  Hesse  Darmstadt,  of  which  the  Prussian  tariff  of  1818 
was  the  basis,  the  custom-houses  between  the  two  countries 
being  wholly  removed,  —  each  State,  however,  reserved  the 
right  to  establish  duties  of  consumption  on  sundry  articles  of 
food  and  drink;  and  Prussia  was  allowed  to  maintain  the 
monopoly  of  salt  and  playing-cards. 

The  objects  proposed  by  the  Zollverein  were  the  removal 
of  all  restrictions  to  communication  and  transit,  the  abolition 
of  all  internal  custom-houses,  the  establishment  of  a  common 
tariff  and  system  of  collection,  and  the  repartition  of  the 
receipts  on  all  imports  and  exports  according  to  the  popu- 
lation among  all  the  members  of  the  League.  The  States 
reserved  to  themselves  the  right  of  introducing  any  local 
arrangements  which  did  not  interfere  with  the  general  princi- 
ples, —  of  nominating  the  functionaries  of  their  own  districts, 
and  of  examining  the  accountancy  of  any  part  of  the  League. 
The  League  is  bound  not  to  interfere  with  matters  of  local 
revenue,  such  as  port-dues,  turnpikes,  tolls,  etc.  The  Prussian 
tariff  of  1818  was  recognized  as  establishing  the  maximum  of 
duties.  It  was  determined  that  a  common  system  of  moneys, 
weights,  and  measures,  should  replace,  as  soon  as  possible, 
the  various  complicated  and  discordant  usages  of  the  dif- 
ferent States  of  the  union,  and  that  the  whole  influence  of 
the  union  should  be  directed  towards  the  extension  of  its 
commercial  relations  with  other  States.  The  intention  of 
the  tariff  is  to  admit  raw  materials  without  any,  or  on  merely 
a  nominal  duty.  The  lightest  duty  levied  is  on  silk  goods, 
amounting  to  110  dollars  per  cwt.,  or  about  3  shillings  ster- 
ling per  Ib.^  The  common  rate  of  duty  is  half  a  dollar,  or 
Is.  6d.  per  cwt.  on  all  articles  not  specially  excepted.  The 
tariff,  as  fixed  by  the  Congress  which  has  just  closed  its 
labors,  will  be  found  in  the  Appendix  IL  (Pari.  Doc,  p.  78). 

It  would  ill  become  me,  in  this  report,  to  discuss  —  though 

^  The  duty  levied  by  the  English  tariff  on  silk  goods  is  from  lis.  to  27s.  Qd. 
per  lb. 


u»\ 


THE  ZOLLVEREIN. 


179 


I  cannot  pass  over  in  absolute  silence  —  the  probable  political 
consequences  of  the  establishment  of  the  Zollverein.  They 
certainly  were  not  lost  sight  of  by  its  founders.  The  intimate 
connection  between  commercial  and  political  interests  is  obAd- 
ous ;  and  the  advocates  of  the  League  did  not  fail  to  perceive 
that  no  political  alliance  would  be  so  strong  as  that  based 
upon  a  community  of  pecuniary  and  social  interests.  The 
jarring  of  differently  constituted  institutions,  tlie  local  jeal- 
ousies which  still  exert  their  influences,  the  clashing  of 
personal  and  privileged  interests  with  the  public  weal,  have 
prevented,  to  a  certain  extent,  the  fusion  which  would  other- 
wise have  taken  place,  so  that  the  political  and  the  commercial 
policy  are  not  always  identified ;  but  it  cannot  be  denied  that 
nrder  a  wise  direction  the  machinery  of  the  Zollverein  would 
become  a  very  mighty  political  engine,  which  would  be 
brought  to  bear  with  great  power  upon  the  future  concerns 
of  Europe  and  the  world  at  large. 

The  general  feeling  in  Germany  towards  the  Zollverein  is, 
tnat  it  is  the  first  step  towards  what  is  called  the  German- 
ization  of  the  people.  It  has  broken  down  some  of  the 
strongest  holds  of  alienation  and  hostility.  By  a  community 
of  interests  on  commercial  and  trading  questions  it  has  pre- 
pared the  way  for  a  political  nationality,  —  it  has  subdued 
much  local  feeling,  prejudice,  and  habit,  and  replaced  them 
by  a  wider  and  stronger  element  of  German  nationality. 

The  Zollverein,  by  directing  capital  to  internal,  in  prefer- 
ence to  external  trade,  has  already  had  a  great  influence 
in  improving  the  roads,  the  canals,  the  means  of  travelling, 
the  transport  of  letters,  —  in  a  word,  in  giving  additional  im- 
pulse to  inland  communications  of  every  sort.  The  isolation 
of  the  several  German  States,  with  separate  fiscal  interests, 
and  often  hostile  legislation,  prevented  those  facilities  from 
being  given  to  intercourse  which  are  alike  the  evidence  and 
the  means  of  civilization.  On  every  side  beneficial  changes 
are  taking  place.  Railways  are  being  constructed  in  many 
parts  of  the  German  territory,  steamboats  are  crowding  the 
German  ports  and  coasting  along  the  German  shores ;  every- 
thing is  transported  with  greater  cheapness  and  rapidity. 


\  -'i 


IS 

( 


uAn 


■n 


I 


m 


•ii 


II: 
It 


iif- 


f.     !<t 


1 1" 
if 


180 


ECONOMIC  HISTORY. 


But  whatever  opinions  may  be  formed  as  to  the  effect  of 
the  Commercial  League  upon  British  interests,  it  is  now  too 
late  to  discuss  tlicm  beneficially.  The  League  exists,  and  is 
not  likely  to  be  broken  up ;  the  separate  interests  of  the 
different  States  are  blended  in  the  common  interests  of  the 
Zollverein ;  all  the  topics  of  comparison  between  the  general 
tariff  and  the  tariffs  which  previously  existed  in  the  various 
independent  States  of  the  union  are  now  removed ;  whatever 
existed  of  local  fiscal  influence  is  merged  in  the  common  alli- 
ance, and  the  League  must  now  be  accepted  and  treated  with 
as  a  body  more  iulluential  than  were  any  of  its  members,  — 
capable  of  controlling  the  smaller  influences  of  its  component 
parts  by  the  concentrated  influence  of  the  whole. 

It  is  natural  that  a  body  so  powerful  as  the  Commercial 
League  should  seek  to  extend  its  influence.  More  coasts, 
more  ports,  and  more  shipping  are  the  three  desiderata  whicn 
are  put  forward  by  its  advocates  and  members.  For  the 
coasts  and  the  ports  of  the  Baltic  belonging  to  the  union  are 
so  much  cramped  and  prejudiced  by  the  Sound  dues  that  they 
cannot  meet,  in  any  of  the  great  emporiums  of  trade  out  of 
the  Baltic,  the  competition  of  the  ports  and  coast  south  of  the 
Baltic;  while  the  ports,  such  as  Hamburg,  Rotterdam,  etc., 
which  are  the  natural  outlets  of  the  great  rivers  which  run 
through  the  provinces  of  the  League,  all  belong  to  States  not 
associated  with  it.  The  subject  has  been  discussed  of  giving 
a  flag  to  the  Zollverein,  as  it  has  already  a  coinage ;  but  to 
possess  a  marine,  both  warlike  and  commercial,  in  order  to 
compete  with  the  growing  squadrons  of  Russia,  and  to  be  on 
a  level  with  the  Hansc  Towns  and  with  Plolland,  is  an  object 
mucli  insisted  on,  but  which  does  not  seem  to  present  any 
immediate  prospects  of  realization. 

On  the  30th  of  July,  1838,  an  arrangement  was  made 
(Appendix  III.,  Pari.  Doc,  p.  95)  for  introducing  a  unity  of 
currency,  to  take  effect  from  the  1st  of  January,  1841,  the 
unity  to  consist  of  the  mark,  weighing  '2.^^-^^^^  grammes. 

The  mark  to  be  represented  by  fourteen  dollars ;  the  dollar 
by  If  florins ;  and  the  florin  to  be  ^^  of  a  dollar. 

The  accounts  to  be  kept  either  in  dollars  (Prussian  crowns) 
or  florins  (guilders). 


ill 


to 

to 

on 

cct 

any 


THE  ZOLLVEREIN. 


181 


Two  millions  of  pieces  of  two  dollars  each  are  to  be  coined 
before  the  Ist  of  January,  1842.  The  coinage  has  already 
been  introduced  ;  it  bears  the  effigies  of  the  King  of  Prussia, 
and  has  on  the  reverse  the  inscription  of  Vereins  Atiinze,  or 
"  Association's  Money." 

The  future  influences  and  direction  of  the  Zollverein  will 
1)0  determined  not  alone  by  the  growing  strength  of  the  inter- 
ests it  represents,  but  by  the  direction  which  foreign  nations 
trading  with  Germany  may  be  able  or  willing  to  give  to  their 
own  commercial  legislation ;  for,  however  enlightened  may 
be  the  policy,  and  however  sincere  the  purpose,  of  the  states- 
men of  Germany  to  prevent  the  League  becoming  an  in- 
strument for  advancing  the  minor  interests  of  certain  classes 
of  producers,  as  opposed  to  the  major  interests  of  greater 
producers,  and  to  the  general  interests  of  the  whole  body 
of  consumers,  all  experience  shows  that  the  minor  interest, 
being  more  youthful,  vigorous,  and  concentrated,  weighs  in 
the  balance  for  much  more  than  its  real  value.  The  agi  icul- 
tural  interest,  for  example,  whiol^  in  the  States  of  the  union 
is  the  most  diffused,  the  most  important,  and  the  most  pro- 
ductive, will  not,  in  the  contest  with  the  rising  manufacturin<^' 
interest,  obtain  its  full  share  of  power,  dependent  as  it  mnst 
naturally  be  to  a  great  extent  on  the  demands  of  foieign 
markets.  For  it  is  to  foreign  markets  alone  it  can  look  for 
the  sale  of  that  surplus  produce  which  home  demand  does  not 
consume,  and  wliich,  as  long  as  it  remains  without  vent,  must 
create  a  depression  in  the  price  of  the  whole  quantity  pro- 
duced. Hitherto  the  operation  of  the  Zollverein  has  been  to 
strengthen  the  manufacturing  interest  at  the  expense  of  the 
agricultural.  As  the  foreign  demand  for  agricultural  produce 
has  been  uncertain  and  capricious,  the  low  average  prices 
have  operated,  on  the  one  hand,  in  forcing  capital  out  of 
agricultural  into  manufacturing  channels ;  while  the  cheap 
price  of  food  has  given  to  the  German  artisan  great  advan- 
tages in  his  competition  with  the  labor  of  countries  in  which 
the  price  of  food  is  relatively  higher. 

Were  foreign  markets  accessible  to  the  German  agricul- 
turist, there  is  no  doubt  the  flow  of  capital  towards  manu- 


! 


hi 


hr3 


lil 


I; 


fir 


In 


182 


ECONOMIC  HISTORY. 


facturcs  would  be  checked,  first  by  the  increased  demand  for 
agricultural  labor,  and,  secondly,  by  the  loss  of  the  advantage 
which  the  German  artisan  now  possesses  in  the  comparative 
cheapness  of  food.  For  the  prices  of  the  countries  which 
would  be  importers  of  German  corn,  for  example,  would  deter- 
mine the  prices  of  corn  in  the  German  markets  for  the  Ger- 
man consumer.  In  his  own  market  he  must  give  the  same 
price  as  the  foreign  buyer  who  comes  into  that  market. 

One  of  the  great  difficulties  with  which  sound  commercial 
principles  have  had  to  contend,  in  Germany  as  elsewhere,  is 
the  too  general  adoption  of  a  phraseology  which  has  grown 
out  of  a  vicious  legislation,  and  has  to  a  great  extent  popu- 
larized error.  High  duties  on  imported  articles  are  justified 
by  the  plea  that  it  is  necessary  to  afford  protection  to  the 
producer,  while  the  substantial  fact  of  the  consequent  sacrifice 
of  the  consumer  is  wholly  kept  out  of  view.  For  one  case  in 
which  the  loss  to  the  many  is  put  forward,  there  are  a  thousand 
in  which  the  profits  to  the  few  are  urged  as  sufficient  sanction 
to  perverse  legislation. 

Dioterici^  gives  a  very  curious  table  (p.  127),  showing  the 
operation  of  the  Zollverein  during  the  years  1833  to  1835,  on 
imported  articles. 

On  foreign  articles  of  consumption  not  coming  into  compe- 
tition with  German  articles  the  increase  in  the  three  years  is 
as  fifty -four  to  forty-six  ;  in  foreign  articles  of  consumption 
competing  with  German  articles  the  decrease  is  as  twenty- 
four  to  twenty-nine  ;  in  half-manufactured  articles  serving  for 
further  labor  the  increase  is  only  from  9,161  to  9,520 ;  while 
in  wholly  manufactured  articles  the  decrease  is  from  thirteen 
to  ten.  .  .  . 

The  facilities  created  for  communication  by  the  improve- 
ment of  roads,  canals,  etc.,  have  greatly  aided  the  inland 
trade  of  Germany.    At  the  close  of  the  last  war  there  were  no 


y 


*  I  have  had  occasion  constantly  to  consult  Dieterici's  "  Statistischo  Ueber- 
sicht  der  wichtigsten  Gegenstande  des  Verkehrs  und  Verbraucha  ira  Preuesi- 
schen  Staate  und  im  Deutschen  Zollverbande,  von  1831  bis  1830,  aus  amtlichen 
Quellen  dargestellt,"  Berlin,  1838.  The  valuable  facts  he  has  collected  will  be 
found  scattered  over  the  whole  of  this  report. 


'I: 


THE  ZOLLVEREIN. 


188 


roads  of  the  first  class  either  in  Pomerania,  Poscn,  or  Prussia 
proper.  In  1816  the  number  of  German  miles  laid  down  in 
Chausdes  was  523|  =  2,408  English;  in  1828  it  was  1,062|  = 
4,889 ;  and  in  1831, 1,228^  =  5,610 ;  and  this  amount  has  been 
greatly  increased  at  the  present  time. 

Of  the  activity  of  communication,  the  following  official 
returns  of  the  quantities  of  goods  which  passed  through  Prieg- 
nitz  will  furnish  remarkable  evidence :  — 


Years, 


1830  . 

1831  . 

1832  . 
1333  . 
1834  . 


o  o 

r 

1 

1 
1 

a 

1 

9 
O 

n 

6 

1 

1 

a, 

1 

Cwt. 

Cwt. 

Cwt. 

Cwt. 

Cwt. 

Cwt. 

Cwt. 

Cwt. 

246,934 

683,020 

446,567 

48,322 

138,813 

.    .    . 

.    ■  . 

153,314 

229,412 

695,610 

519,086 

45,574 

158,196 

46,988 

.  .  . 

34,088 

246,145 

720,289 

540.240 

53,297 

147,617 

57,213 

18,489 

94,899 

200,664 

700,858 

477,979 

32,902 

132,612 

50,948 

9,694 

80,595 

307.087 

927,764 

755,038 

28,575 

221,623 

70,728 

11,067 

906,112 

Totol  ia 
Cwt. 


1,716,963 
1,628,954 
1,878,19a 
1,746,198 
3,225,998 


^>'i 


j*4 


I  I 


I  ' 


It  must  not  be  forgotten  that  Great  Britain  had  long  enjoyed 
]>eculiar  advantages  in  the  facilities  of  communication ;  and  to 
these  facilities  much  of  the  activity  and  success  of  her  manu- 
facturing and  commercial  industry  is  attributable.  For  many 
years  her  progress  in  this  respect  created  almost  a  monopoly 
of  benefit;  but  the  advantages  she  enjoyed  are  now  partici- 
pated in  by  other  nations ;  and  in  Germany  especially  great 
advances  have  been  made,  and  continue  to  be  made,  in  all 
those  improvements  which  facilitate  intercourse. 

It  is  obvious  that  England  cannot  long  maintain  exclusive 
possession  of  advantages  which  civilized  man  is  everywhere 
successfully  struggling  to  obtain.  Railroads  arc  noAV  being 
introduced  between  the  principal  towns  in  the  Zollverein,  — 
those  between  Dresden  and  Leipzig  and  between  Berlin  and 
Potsdam  are  completed,  many  others  are  begun,  and  a  still 
greater  number  are  projected;  and  in  these  enterprises  the 
undertakers  have  all  the  advantages  of  our  experience.    The 


M 


''i\ 


c  '    1'  '^'i 

?   t       .*      TiJ 


!   it 


IP 


Hi 


!)i:   i« 


If 


» I 


i     'li' 


18! 


Mil 


184 


ECONOMIC  HISTORY. 


number  of  canals  has  considerably  increased ;  steamers  are 
giving  great  development  to  river  navigation;  and  even  in 
those  branches  of  industry  in.  which  our  superiority  is  the 
most  marked,  such  as  the  manufacture  of  machinery,  com- 
petition is  marching  after  us  with  rapid  strides. 

But,  independently  of  the  progress  of  Germany  towards  a 
participation  in  the  advantages  which  for  a  scries  of  years 
have  been  almost  exclusively  possessed  by  Great  Britain,  she 
has  aptitudes  and  facilities  of  her  own  which  must  greatly  aid 
her  in  the  development  of  her  industry.  The  frugal  and 
economical  habits  of  the  German  people  enable  them  to  pro- 
cure a  far  greater  proportion  of  comforts  for  the  same  pro- 
portional rate  of  wages  than  are  generally  obtained  by  the 
English  laborer;  added  to  which  a  simpler  mode  of  life,  a 
smaller  consumption  of  animal  food,  and  a  less  costly  class  of 
garments,  leave  out  of  their  smaller  earnings  a  larger  amount 
of  savings.  Their  savings  are,  for  the  most  part,  invested  in 
tlie  pui'chase  of  the  house  in  which  they  dwell,  and  the  garden 
which  they  cultivate,  —  whose  cultivation  is  alike  a  source  of 
health,  enjoyment,  and  profit,  being  in  most  cases  a  valuable 
auxiliary  to  manufacturing  industry.  Nor  ought  the  general, 
the  almost  universal  education  of  the  population,  be  forgotten 
as  immensely  contributory  to  the  public  prosperity.  Elemen- 
tary instruction  is  provided  for  all,  and  special  instruction  for 
those  who,  in  any  department  of  art  or  industry,  exhibit  any 
particular  aptitude.  I  have  given  in  the  Appendix  (IV.,  Pari. 
Doc,  pp.  96-97),  a  short  account  of  the  Gewerbe-Schule  at 
Berlin,  which  under  the  admirable  superintendence  of  M. 
Banth  (whose  services  to  his  country  arc  beyond  all  estimate, 
and  above  all  praise),  has  first  gathered  from  every  part  of 
the  kingdom  the  youths  best  fitted  for  scientific  training ;  and, 
after  a  thorough  course  of  education,  has  again  dispersed  them 
over  the  country.  The  gradual  diffusion  of  a  knowledge  and 
a  taste  for  art  over  the  whole  field  of  German  industry,  its 
happy  influence  upon  all  manufactures,  exhibited  in  a  thou- 
sand evidences  of  improvement,  are  obvious  to  every  observer. 
Manual  skill  and  experience,  more  and  more  intimately  asso- 
ciated with  scientific  instruction,  have  been  long  preparing 


it: 


I}:,'- 


THE  ZOLLVEREIN. 


185 


the  most  important  results ;  and  when  the  rising  generation 
of  intelligent  artisans  bring  their  information  and  taste  into 
the  wide  region  of  manufacturing  and  commercial  competi- 
tion, there  can  be  no  doubt  of  their  contributing  largely  to 
the  general  wealth  and  weal. 

The  tariff  of  the  Zollverein  has  no  other  prohibitions  than 
those  of  salt  and  playing-cards,  which  are  monopolies  in 
Prussia ;  and  the  principle  of  the  tariff  is  to  admit  raw- 
material,  and  materials  serving  the  ends  of  agriculture  and 
manufactures,  either  on  very  low,  or  without  any  duties. 
Thus,  raw  cotton,  wool,  coals,  pig-iron,  ores,  raw  hides,  and 
skins,  hare  and  rabbit  skins,  potashes,  common  pottery,  tur- 
pentine, common  furniture,  chalk,  rags,  raw  refuse  of  sundry 
manufactures,  trees  for  planting,  manure,  earths,  fish,  grass 
and  hay,  garden  produce,  birds,  blacklead,  worn  clothes, 
precious  metals,  wood,  turf,  fresh  fruit,  milk,  seeds,  etc.,  pay 
no  duties  at  all. 

The  objections  to  the  tariff  of  the  Zollverein  are  twofold ; 
they  refer  to  the  amount  of  duties  levied,  and  to  the  manner 
in  which  they  are  levied. 

The  duties  are  far  higher  than  the  Prussian  government 
professed  its  intention  to  levy.  They  were  intended  to  repre- 
sent the  tariffs  of  Prussia.  Now,  in  the  communication  of 
Baron  Maltzahn  to  Mr.  Canning,  dated  Dec.  25,  1825,  and 
laid  before  Parliament,  by  order  of  Her  Majesty,  in  answer 
to  the  address  of  the  House  of  Commons  of  1st  July,  1839, 
the  words  of  the  Prussian  minister  arc  as  follows :  — 

"  No  one  of  the  duties  on  imports  is  sufficiently  high  to 
prevent  the  importation  of  foreign  products,  as  is  proved  by 
their  extensive  sale  in  all  parts  of  the  monarchy.  The  duties 
levied  on  the  products  of  foreign  fabrics  or  manufactures 
arc  generally  only  ten  per  cent  on  their  value ;  on  some  they 
amount  to  fifteen  per  cent,  but  there  are  many  which  are 
more  moderate." 

But  these  repi-esentations  are  certainly  not  borne  out  by 
facts ;  for,  not  only  do  the  duties  levied  on  manufactures  vary 
from  twenty  to  eighty  per  cent  (instead  of  from  ten  to  fifteen 
per  cent),  but  there  are  great  varieties  of  goods  which  are 


w. 


t  1- 
1 


1^™ 


\: 


' 


1 


'til 


' 


•  1 

i!  ! 

I         t 

i 
I '4 

r.i; 
1  i^ 


186 


ECONOMIC  IIISTOIiY. 


.  'i' 


I'iiS^ 


wholly  excluded  from  the  Prussian  markets  in  consequence 
of  the  elevation  of  the  tarift". 

The  manner  in  which  the  duties  are  levied  is  such  as  to 
press  most  severely,  with  reference  to  their  cost,  on  coarse, 
inferior  and  heavy  articles ;  those  least  able  to  bear  a  high 
rate  of  duty  arc  most  imposed,  the  same  amount  of  duty  being 
taken  en  all  species  of  goods  made  of  the  same  raw  material, 
—  the  finest  (pialities  pay  the  least,  and  the  lowest  qualities 
the  highest  amount.  The  ad  valorem  principle,  which  is  in 
its  nature  the  fairest,  because  it  distributes  taxation  l)y  the 
measure  of  wealth  and  expenditure,  is  wholly  lost  sight  of, 
and  the  goods  employed  by  the  poor  arc  visited  by  a  much 
heavier  rate  of  taxation  than  those  by  the  opulent.  The 
richest  muslin  and  the  coarsest  calico,  the  cloth  of  Sedan  and 
the  serge  of  Devon  pay  the  same  amount  per  cwt.  Hence 
articles  of  low  quality  —  such  as  are  used  by  the  many,  such 
as  would  have  the  largest  sale  —  are  wholly  ex  iluded  from 
the  markets  of  the  League. 

It  caimot  be  disputed  that  t\\o  ad  valorem  system,  as  applied 
to  manufactures,  has  many  inconveniences  and  ditticulties.  It 
is  not  easy  always  to  ascertain  even  the  approximative  value  ; 
and  with  the  number  of  custom-houses  by  which  goods  arc 
allowed  to  be  imported  through  a  frontier,  both  of  sea  and 
land,  so  various  and  extensive  as  that  of  the  Commercial 
League,  it  would  be  out  of  the  question  to  seek  for  a  sufficiency 
of  custom-house  functionaries,  with  knowledge  and  experience 
competent  to  the  protection  of  the  revenue  against  fraud. 
There  is  no  system  so  simple  as  that  of  weight ;  it  is  intelli- 
gible to  everybody ;  it  is,  too,  a  generally  popular  system,  as 
it  affords  no  latitude  for  the  caprice  of  the  officer,  and  opens 
no  door  to  the  frauds  of  the  importer.  It  might  probably 
be  associated  with  some  classification  of  articles,  if  not  too 
detailed  or  complicated,  into  a  few  great  divisions ;  but  the 
desirableness  of  a  thorough  change  in  the  system  itself  may 
well  be  doubted,  and  such  a  proposal  is  not  likely  to  be 
entertained. 

The  Americans  have  strongly  objected  to  the  system  of 
levying  duties  by  weight,  instead  of  on  value.    They  have 


Ml 


THE  ZOLIVEREIN. 


187 


represented  that  the  duty  of  ^  dollars  on  their  tobacco,  being 
the  same  as  that  levied  on  the  tobaccos  of  the  Havana  and 
the  Spanish  colonics,  is,  in  fact,  a  discriminating  duty  on 
their  produce,  even  to  the  extent  of  two  hundred  to  three 
hundred  dtjlhirs  per  cent.  They  complain  that  while  tlie 
duties  in  the  United  States  on  the  articles  imported  from 
Germany  do  not  upon  the  whole  amount  pay  more  than  an 
average  of  5|  per  cent,  the  imjiorts  from  the  United  States 
into  the  ZoUverein  i)ay  forty-six  per  cent  duty.  They  re- 
present that  Prussia  levies  on  American  produce  a  gross 
revenue  of  770,006  dollars ;  and  while  the  United  States 
receive  only  159,003  dollars  from  imports  of  the  ZoUverein. 
Of  about  four  millions  of  dollars  exported  from  the  Com- 
mercial League  to  the  United  States  three  millions  (one  and 
one-half  millions  of  linens,  one  million  of  silk,  and  half  a  mil- 
lion merino  and  other  similar  articles)  pay  no  duty  at  all. 
The  remaining  million  is  principally  composed  of  glass,  hard- 
ware, hosiery,  etc.,  paying  from  twenty  to  twenty-five  per 
cent. 

The  original  intention  of  the  Prussian  tariff  has  certainly 
been  much  departed  from,  and  the  general  principle  which 
was  put  forward  has  not  been  carried  out  In  its  details.  For 
not  only  did  the  Prussian  government,  in  its  ofhcial  corre- 
spondence, declare  that  it  was  its  purpose  not  to  lay  duties 
exceeding  from  ten  to  fifteen  per  cent,  but  the  Commercial 
League  itself  professed  to  make  the  Prussian  tariff  the  basis 
of  the  legislation  of  the  union ;  and  the  maximum  intended 
to  be  established  by  the  Prussian  tariff  was  an  ad  valorem 
ten  per  cent  on  manufactures;  for  that  tariff  provides  that 
"The  duty  on  consumption  in  foreign  fabrics  and  manufac- 
tured goods  shall  not  exceed  ten  per  cent;  and  it  shall  be 
less,  whenever  a  smaller  duty  can  be  imposed  without  injury 
to  the  national  industry."^  But  the  duties  levied  being,  on 
cotton  manufactures,  £1  lOs.  per  cwt.;  on  woollens,  ^4  lOa. ; 
on  hardware,  £>%  5*. ;  on  common  linens,  33s. ;  on  fine  linens, 
X3  6s. ;  and  on  silks,  £16  lOs.,  per  cwt.,  —  do,  on  the  whole, 


i 


vl 


i 


■fi 


<  li 


1  <• 


Allgemeiue  Zeitung,"  2d  December,  1834. 


il* 


liif. 


K'S 


if 


Wi 


m 

I  Hi 


•its 

111 


%  if 


II 


A 


188 


ECONOMIC  HISTORY. 


greatly  exceed  the  proposed  ton  per  cent.  Tho  system  of 
imposing  tho  duty  by  weight  has  tho  advantage  of  great  sim- 
plicity, but  it  acts  in  complete  hostility  to  tho  ad  valorem 
principle,  as  tho  duty  increases,  instead  of  diminishing,  with 
tho  lownoss  and  coarseness  of  tho  article ;  so  that  tho  oper- 
ation of  tho  tariff  is  as  complete  an  exclusion  of  every  low- 
priced  manufacture  as  if  it  were  absolutely  prohibited.  Under 
the  influence  of  this  state  of  things,  the  duty  on  cotton  goods 
varies  from  three  and  one  half  to  one  hundred  and  twenty 
per  cent. 

It  has  been  remarked  that  this  system  fails  in  the  very  ends 
proposed,  namely,  to  distribute  tho  amount  of  protection  in 
proportion  to  the  backwardness  of  the  manufacture.  C:i  cer- 
tain articles  the  amount  of  duty  is  so  heavy  as  completely  to 
exclude  foreign  competition,  where  tho  homo  production  re- 
quires no  such  encouragement  as  that  afforded  by  the  tariff ; 
and  on  others,  where  a  protecting  duty  is  required  by  the  con- 
dition of  the  home  production,  tho  duty  on  the  foreign  article 
is  small,  and  insufficient  to  check  its  introduction.  Uut  tho 
general  result  of  the  tariff  is  to  exclude  the  foreign  articles  of 
low  quality  and  general  consumption,  and  thus  to  keep  the 
largo  demand  exclusively  for  the  home  manufacturers.  One 
baneful  effect  is,  however,  that  tho  increased  price  is  levied 
on  those  who  are  least  able  to  pay,  and  levied  on  articles  of 
the  lowest  value,  for  tho  piece  goods  which  are  consumed  by 
the  opulent  are  precisely  those  upon  which  the  smallest  amount 
of  duty  is  collected. 

It  has,  indeed,  been  argued  that  the  levying  heavy  duties 
npon  manufactures  of  ordinary  quality,  so  as  to  exclude  them 
from  the  markets  of  the  league,  is,  in  fact,  to  create  a  demand 
for  superior  articles,  and  so  confer  a  benefit  upon  the  German 
consumer ;  but  to  the  immense  multitude  of  consumers,  cost 
is  tho  all-important  consideration ;  and  to  deny  access  to  low- 
priced  articles  —  or  by  prohibitory  duties  on  foreign  fabrics, 
considerably  to  elevate  the  price  of  the  home-made  article  — 
is,  in  all  cases,  to  levy  an  unfair  and  unequal  contribution  on 
the  poor,  and  in  many  cases  wholly  to  exclude  them  from  tho 
enjoyment  of  what  would  otherwise  be  accessible  to  them.    In 


THE  ZOLLVEREIN. 


189 


i  !* ; 


fact,  to  exclude  the  ordinary  manufactures  of  foreign  countries 
is  to  give  a  8i)ccial  premium  to  the  production  of  ordinary 
manufactures  at  home,  is  to  create  for  the  least  advanced, 
tho  least  intellij^ent  indi  stry,  a  field  of  peculiar  favor;  and 
it  may  bo  well  doubted  if  tho  monopoly  thus  established  for 
tho  manufacture  of  low  articles  is  beneficial  to  them.  That 
it  is  prejudicial  to  the  consumers  is  obvious,  but  some  of  tho 
ablest  writers  on  the  ZoUvcrein  have  expressed  their  convic- 
tion that  tho  uncontrolled  power  given  to  the  German  manu- 
facturer of  low  articles  in  the  German  market  is  baneful  as 
well  to  his  own  as  to  the  public  interest.^ 

Tho  tendency  of  opinion  in  Germany  is  towards  free  trade. 
Almost  every  author  of  reputation  represents  tho  existing 
system  as  an  instrument  for  obtaining  changes  in  favor  of 
commercial  liberty.  One  of  tho  most  distinguished  writers 
on  the  Commercial  League,  in  cautioning  the  capitalist  from 
embarking  his  wealth  in  tho  protected  branches  of  industry, 
says,  *'  You  are  building  ships  which  are  not  prepared  for  the 
storm.  You  are  creating  interests  which  cannot  make  their 
way  through  a  crisis;  you  arc  erecting  edifices  upon  sand."^ 

It  should  be  borne  in  mind,  however,  that  the  tariffs  of  tho 
ZoUvcrein  are  far  more  liberal  than  the  old  tariffs  of  Prussia, 
which  were  intended  wholly  to  exclude  foreign  manufactures. 
But  diminished  duties  have  not  injured  her  own  manufactures. 
No  man  is  found  to  deny  that  tliey  have  made  a  much  greater 
progress  under  a  less  protection  than  they  made  when  the 
home  market  was,  by  a  greater  protection,  closed  against  for- 
eign competition. 

The  Prussian  tariff  of  1818  was  a  great  improvement  on 
preceding  legislation,  but  it  contained  many  incongruities, 
which  were  changed  by  the  tariff  of  1822.  On  many  articles 
the  duties  varied  between  the  eastern  and  western  provinces. 
Common  cloths,  which  paid  2G  rix-d.  22^  gr.,  and  fine  cloths 
paying  47  rix-d.  10|  gr.  in  the  eastern  provinces,  paid  only 
22  rix-d.  18|  gr.,  and  43  rix-d.  7i  gr.  in  the  western ;  cotton 

^  See  Osiander,  "  Bctrachtungcn  iiber  don  Zoll  Preussischen  Tarif ."  Stut- 
gart,  1837,  pp.  «9,  90. 

"  See  Osiander,  "  Betrachtungen,"  p.  97. 


M 


'M 


'm 


'i' 


'   { 

'  ''A 


mmm 


,     «'m 


H  i  : 


I 


m 


ir 


III- 


190 


ECONOMIC  HISTORY. 


twist  paid  2  rix-d.  10  gr.  in  the  eastern,  and  only  half  that 
amount  iu  the  western  provinces;  while  dyed  twist  paid 
6  rix-d.  17^  gr.  in  the  former,  and  5' rix-d.  17^  gr.  in  the 
latter.  White  and  colored  woven  cottons  and  cottons  mixed 
with  thread  paid  the  same  duties  as  fine  woollens,  namely, 
47  rix-d.  10^  gr.  and  43  rix-d.  7i  gr. ;  and  printed  and  fine 
cottons,  61  rix-d.  3}  gr.  in  eastern,  and  57  rix-d.  in  western 
districts ;  gray  linens  2  rix-d.  and  1  rix-d.  22|  gr.,  and 
bleached,  12  rix-d  65  and  8  rix-d.  8^  gr. ;  silks,  171  rix-d. 
3 J  gr.  in  the  eastern,  and  167  rix-d.  in  the  western  depart- 
ment; half  silks,  79  rix-d.  131  gr.,  and  75  rix-d.  10  gr. 
Common  iron  goods  paid  6  rix-d.  17|  gr.  in  the  east,  and 

5  rix-d.  2^  gr.  in  the  west;  fine  iron  goods,  24  rix-d.  12i  gr., 
and  20  rix-d.  10  gr. ;  and  cutlery  and  fine  hardware,  79  I'ix-d. 
13i  gr.,  and  75  rix-d.  10  gr.  The  tariff  of  1822  left  the 
distinction  only  existing  on  cotton  twist;  introduced  a  uni- 
form duty  of  30  rix-d.  on  woollens,  and  6  rix-d.  on  dyed  twist; 
60  rix-d.  on  cottons  generally,  but  reduced  the  duty  on  cot- 
tons mixed  with  thread  to  10  rix-d.,  which  it  also  levied  on 
bleached  linens ;  lowered  the  duties  on  silks  to  100  rix-d., 
and  on  half-silks  to  50  rix-d.;  on  common  iron  goods  levied 

6  ri.x-d. ;  on  fine,  10  rix-d.;  and  on  cutlery  and  hardware, 
50  rix-d. 

Thus  the  tariff  of  1822  was  in  every  respect  an  improve- 
ment on  that  of  1818.  In  1825  the  duties  on  woollen  warps 
were  reduced  from  30  rix-d.  to  10  rix-d.;  and  those  on  car- 
pets of  wool  and  thread  from  30  rix-d.  to  20  rix-d. ;  those  on 
fine  linens  and  cottons  mixed  with  flax  were  raised  from 
10  rix-d.  to  20  rix-d.  In  1828  the  duties  on  flannels,  mol- 
tons,  etc.,  were  reduced  from  30  rix-d.  to  10  rix-d.,  and  on 
woollen  carpets  from  30  to  20  rix-d. 

Up  to  this  period  half  the  duty  was  payable  in  friederlchs 
iVoi',  which  was  an  augmentation  of  about  six  per  cent  upon 
the  tariff.  In  1832  the  duty  on  wocHen  yarn  was  lowered 
from  0  rix-d.  to  15  silver  gr. ;  on  carpets  in  general  it  was 
lowered  from  30  rix-d.  to  22  rix-d. ;  on  woollens  it  was  raised 
from  30  rix-d.  to  33  rix-d.;  on  cotton  yarns  2  rix-d.  were 
established  as  a  general  duty ;  55  rix-d.  on  cottons  and  cut- 


m 


..it-": 

\l>k  l 


THE  ZOLLVEREIN. 


191 


lery,  instead  of  50,  which  50  continued  to  be  levied  on  cotton 
and  flax  manufacturers;  and  the  duties  on  silk  were  raised 
from  100  rix-d.  to  110  rix-d.  The  tariff  of  the  Zollverein, 
in  1834,  reduced  the  duty  on  carpets  from  32  rix-d.  to 
20  rix-d.;  and  on  woollens  generally  from  33  rix-d.  to 
30  rix-d. ;  on  cottons  from  55  rix-d.  to  50  rix-d.  Tlie  duty 
on  linen  thread  was  raised,  in  1837,  from  6  rix-d.  to  8  rix-d. ; 
and  on  twisted  cotton  to  the  same  amount.  The  tariff  of 
1840  has  lowered  the  duties  on  cutlery  and  hardware  from 
55  rix-d.  to  50  rix-d. 

The  changes  introduced  by  the  Congress  of  1839  into  the 
tariffs  01"  1837-39,  are  not  very  considerable.  The  adoption 
of  the  unity  of  50  kil.  as  the  cwt.  of  the  tariff,  operates  as 
an  elevation  of  2|^  per  cent,  in  all  cases,  when  it  applies  to 
articles,  the  duty  on  which  is  charged  by  weight,  as  is  the 
case  with  the  major  part  of  the  goods  mentioned  in  the  tariff. 
The  system  of  tarification  has  been  simplified  throughout  by 
the  cutting  off  all  fractions  of  lbs.  The  most  important 
change  is  the  reduction  of  the  sugar,  rice,  and  hardware  du- 
ties. .  .  .  Tlio  standard  of  the  florin  is  altered  from  24  gold 
standard  to  24A  gold  standard ;  so  that,  under  the  new  tariff, 
the  rix  dollar  is  now  represented  by  If  fl.,  instead  of  If,  as 
in  tlie  former  tariff.  Thus,  the  general  rate  of  import  duty 
(when  there  is  no  special  exception)  was,  in  1837-39,  one- 
half  Prussian  dollar,  or  15  silver  gr.,  represented  by  50  kreut- 
zers ;  but  at  present  the  general  import  duty  of  one-half 
Prussian  dollar  is  represented  by  52i  krs. 

Attached  to  the  custom-house  tariff  will  be  found  the  va- 
rious regulations  under  which  the  transit  duties  are  levied  in 
the  States  of  the  Prussian  Union. 

The  legislature  yji  Prussia  has  generally  made  the  transit 
of  goods  tlirough  her  provinces  a  source  of  revenue ;  and  it 
has  not  been  wholly  unproductive,  as  a  large  portion  of  Po- 
land and  southern  Russia  import  and  export  through  the 
Prussian  ports  in  the  Baltic.  The  difficulties  which  Russian 
legislation  has  always  thrown  in  the  way  of  transit  may,  per- 
haps, have  had  some  influence  on  the  councils  of  Prussia ;  in 
fact,  the  lieavy  transit-duty  imposed  on  goods  imi)orted  through 


^h\ 


si 


♦I: 


192 


ECONOMIC  HISTORY. 


I 

it 


I  '    J 

if! 


I  ' 

m 


the  ports  of  the  Baltic  could  hardly  be  maintained  were  the 
Prussian  transit-system  a  wise  and  liberal  one.  The  South- 
ern States  of  the  union  have,  for  the  most  part,  endeavored 
to  secure  through  their  territories  a  cheap  transit  for  com- 
modities intended  for  other  countries.  The  general  princi- 
ples of  the  transit  law  are,  that, — 

1.  All  articles  admitted  without  duty  shall  transit  without 
duty  through  the  ZoUverein. 

2.  All  articles  upon  which  the  export  and  import  duties, 
separate  or  together,  do  not  amount  to  i  dol.  or  52^  kr.  per 
cwt.,  are  to  pay  the  amount  of  the  said  duties. 

3.  All  articles  upon  which, the  export  and  import  duties 
exceed  ^  dol.,  or  52i  kr.  per  cwt.,  shall  pay  on  transit  i  dol. 
per  cwt. 

But  there  are  many  exceptions.  The  exceptional  transit 
duties  levied  by  the  tariffs  of  the  Zollvercin  arc  :  On  cotton 
and  other -goods,  coming  or  going  through  Baltic  ports,  4  dol. 
(12s.)  per  cwt. ;  through  other  roads,  2  dol.  (Gs.)  per  cwt. ;  on 
cotton  twist  and  dyed  woollen  yarn,  2  dol. ;  on  copper,  coffee, 
etc.,  1  dol.  per  cwt. ;  on  raw  sugar,  20s.  gr.  (28.). 

But  goods  going  from  the  Oder  mouth  on  tlie  left  bank  of 
the  Oder,  westward,  towards  the  Rhine,  and  through  the 
frontier  between  Ncu-Benin,  in  Silesia,  to  Tliorn,  in  Bavaria ; 
or,  entering  the  right  bank  of  the  Rhine  again,  to  traverse 
the  Rhine  for  export,  cottons,  woollens,  and  many  other 
articles,  1  dol.  (3s.)  per  cwt. 

Goods  conveyed  by  the  left  bank,  or  on  the  Rhine,  or  on 
the  Moselle,  and  over  the  southern  frontier  between  Hamburg 
and  Freilassing,  or  over  the  northern  frontier  between  the 
Rhine  and  the  Elbe,  10  sq.  (Is.)  per  cwt. 

Goods  conveyed  over  the  southern  frontier,  or  from  the 
Rhine  to  the  Danube,  4 J  sq.  (5Jrf.)  per  cwt. 

Tlic  details  will  be  found  in  the  Appendix  (III.  Pari.  Doc. 
p.  95)  attached  to  the  Tariff. 

The  transit  system  of  the  ZoUverein  is  somewhat  compli- 
cated, and  inconsistent  with  the  general  and  simple  character 
of  the  legislation.  The  tables  in  the  Appendix  (V.  Pari.  Doc. 
pp.  99-112)  will  exhibit  the  amount  of  goods  passing  through 


i^ii 


THE  ZOLLVEREIN. 


193 


the  various  provinces  of  the  League.  One  general  transit 
duty,  of  low  amount,  would  certainly  be  very  favorable  to  the 
carrying  trade  of  the  union  ;  nor  are  the  reasons  quite  ob- 
vious why,  in  the  recognition  of  a  principle  of  equality,  the 
conveyance  of  goods  through  certain  States  of  the  union 
should  be  loaded  with  much  heavier  fiscal  charges  than 
through  others.  It  would  seem  more  accordant  with  sound 
principles  to  encourage  transit  through  the  districts  which 
geographically  present  the  greatest  facilities,  rather  than  to 
give  advantages,  by  lower  duties,  to  districts  less  conveniently 
situated. 

Perhaps  the  wisest  course,  in  the  common  interest  of  the 
Zollvercin,  would  be  to  completely  disassociate  all  fiscal  con- 
siderations from  the  question  of  transit,  and  to  levy  no  other 
duty  than  is  necessary  for  paying  the  expenses  of  collection 
and  control.  The  prohibitory  tariffs  of  Russia,  Poland,  and 
Austria,  certainly  require  no  new  charge  or  impediment  to  be 
added  by  a  heavy  transit  duty  to  the  cost  of  the  articles  im- 
ported through  the  States  of  the  League.  And,  even  with  the 
high  rate  of  duty  levied  (or  perhaps  rather  on  account  of  the 
high  rate  of  duty  levied),  tlie  pecuniary  interest  to  preserve 
the  present  system  is  small,  —  far  too  small  to  counterbalance 
the  disadvantages  and  detriments  which  the  system  creates. 

Another  obvious  inconvenience  and  loss  accrues  to  tlio  Zoll- 
vcrein  from  tlio  motives  which  the  lower  transit  dues  of 
France,  Holland,  and  Belgium  create  for  transporting  goods 
through  the  ports  of  those  countries  instead  of  tlic  ports  of 
Germany ;  added  to  which,  a  habit  of  forwarding  articles  by 
a  particular  line  creates  new  interests  and  motives,  which 
make  it  diHicult  to  revert  to  a  former  state  of  things.  When 
business  has  been  forced  out  of  its  natural  channel  into  a 
novel  course  it  does  not  promptly  resume  its  old  direction, 
and  the  ground  lost  is  often  not  again  to  bo  won. 

The  lowest  transit  duty  levied  in  the  Zollvercin,  with  tlie 
exception  of  the  road  from  Mayence  to  the  southern  frontier, 
is  4J  silver  gr.  (5^(7.)  per  cwt. ;  but  on  the  main  roads  of 
Austria  transit  is  free  from  charge,  while  in  France  the  charge 
is  less  than  half  the  amount  of  the  minimum  Prussian  duty. 

n 


t 


*iv 


>n 


n 


n 

')i 
h 

f'll 
fj 


if 


*  1 


I  it 


m 


?l 


U  i 


194 


ECONOMIC  HISTORY. 


At  the  same  time,  the  advantages  which  the  railroads  of 
Belgium  offer,  and  the  free  navigation  of  the  principal  rivers 
of  Germany,  as  established  by  the  Vienna  Congress,  would 
all  seem  to  co-operate  in  showing  how  much  it  is  for  the  in- 
terest of  the  League  to  facilitate  transit  by  every  possible 
means.^  The  attention  which  has  been  of  late  years  so  suc- 
cessfully given  in  Germany  to  the  improvement  of  the  roads, 
and  all  other  means  of  communication,  cannot  receive  a 
greater  recompense  than  by  encourngcment  given  to  the  tran- 
sit trade  by  a  low  rate  of  duty  levied.  The  profits  deposited 
by  the  transport  of  merchandise,  are,  from  their  cliffusion,  apt 
to  escape  attention  ;  but  perhaps  there  are  none  whif^.h  give  a 
greater  activity  to  agricultural  industry,  nor  which  are  jriore 
intimately  connected  with  the  public  prosperity  and  the  gen- 
eral progress  of  improvement  and  civilization. 

There  is  considerable  difficulty  in  estimating  the  amount 
of  the  imports  from  Great  Britain  into  the  States  of  the  Zoll- 
verein,  as  they  penetrate  through  so  many  channels,  —  not 
only  through  German  ports,  but  from  the  ports  of  Holland 
and  Belgium  and  the  Hanse  Towns.  From  Hamburg  and 
the  Elbe  especially  a  large  part  of  the  wants  of  the  Vcrein 
are  supplied ;  there  are  also  large  importations  through  Rot- 
terdam and  the  Rhine,  as  well  as  through  Bremen  and  the 
Wescr.  But,  by  a  comparison  of  tlie  returns  of  our  imports 
from  and  exports  to  the  various  circumjacent  countries, 
which  have  been  prepared  with  his  accustomed  accuracy  and 
diligence  by  Mr.  Young  (Appendix  VI.  to  IX.  Pari.  Doc. 
pp.  113-139),  with  the  very  detailed  statements  given  me  by 
the  Prussian  government,  all  of  which  documents  will  be 
found  in  the  Appendix  (XI.  to  XVII.,  Pari.  Doc.  pp.  143- 
226),  an  approximate  estimate  of  the  general  amount,  and 
of  the  special  details  of  our  commercial  intercourse  will  be 
obtained. 

Though  the  strong  and  irresistible  tendency  of  an  organ- 
ization like  that  of  the  Commercial  League  is  to  blend  the 
separate  interests  of  its  component  parts  into  the  common 

•'  '  1  Osiander,  pp.  116-117. 


11 


Id- 


be 


THE  ZOLLVEREIN. 


195 


and  paramount  interests  of  the  whole,  and  to  give  to  the 
Union,  as  a  body,  an  influence  sufficiently  powerful  to  pre- 
dominate over  the  local  and  partial  influences  of  the  various 
elements  of  which  that  Union  is  composed,  still  much  time 
and  much  judicious  legislation  will  be  required,  in  order  that 
the  Union  may  fairly  represent  the  various  interests  which 
are  comprehended  in  its  action.  Happily  the  greater  interests 
are  and  must  long  continue  intimately  connected  with  the 
foreign  trade  of  Germany,  —  for  though  the  manufacturing 
tendencies  of  a  portion  of  the  States  of  the  Union,  associated 
as  such  tendencies  are  with  a  restless  activity,  —  a  spirit  of 
association,  a  unity  of  purpose,  a  combined  action,  hich  give 
them  more  than  their  fair  and  full  importance  in  the  struggle 
for  what  is  called  "  protective  legislation,"  yet  it  cannot  bo 
denied  that  there  is  in  Germany  such  a  general  diffusion  of 
intelligence  as  will  check  the  sinister  interests  in  their  de- 
mand for  prohibitory  duties  on  foreign  manufacture.  And  at 
the  present  moment  the  agricultural  interests,  taking  in  the 
whole  of  the  confederated  States,  represent  a  vastly  greater 
amount  of  capital  and  labor  than  the  manufacturing.  The 
agricultural  interest  exists  everywhere  and  in  many  extensive 
provinces  of  the  Union  without  any  counterbalancing  manu- 
facturing interest,  while  the  manufacturing  interest  is  to  a 
great  extent  of  modern  growth,  and  confined  to  a  limited 
portion  of  the  field  of  production.  And  even  that  manufac- 
turing interest  can  only  safe^"  rest  upon  a  system  of  moderate 
duties ;  for  as  soon  as  it  is  able  to  supply  the  markets  of  Ger- 
many, it  must,  for  its  surplus  produce  be  thrown  into  compe- 
tition with  the  manufacturers  of  other  lands,  and  can  only 
compete  successfully  by  cheap  production,  to  which  a  protec- 
tive and  prohibitory  system  is  in  its  very  nature  opposed ;  for 
its  object  and  its  essence  are  to  promise  and  to  secure  high 
prices  to  the  home  manufacturer.  And  if  the  interest  of 
Prussia  for  example  be  considered,  —  Prussia,  whoso  popiila- 
lation  comprises  two  thirds  of  the  whole  population  of  the 
Commercial  Union,  —  it  is  certain  that  not  only  arc  her  true 
interests  hostile  to  any  system  which  prohibits  the  introduc- 
tion of  foreign  manufactures,  her  capital  engaged  in  manufac- 


fN-l' 


'  i 


;flf 


S  ; 


I 


t* 


'.Ml 


196 


ECONOMIC  HISTORY. 


tures  being  inconsiderable  ;  but  the  general  conviction  of  the 
heads  of  departments  in  Prussia  is  opposed  to  a  protecting 
legislation. 

The  financial  necessities  of  Prussia  have  frequently  been 
put  forward  as  the  reason  for  the  high  rate  of  duties  estab- 
lished by  the  tariff  of  the  ZoUverein  ;  ^  but  it  is  clear  that 
many  of  the  rates  are  far  too  high  to  be  productive ;  some  of 
them  are  wholly  prohibitory  ;  and  the  revenue  would  certainly 
be  benefited  by  a  considerable  reduction.  The  ZoUverein, 
however,  has  never  been  regarded  by  the  contracting  States 
with  a  view  solely  to  the  financial  question ;  its  social  and 
political  consequences  would  reconcile  many  of  its  members 
even  to  considerable  pecuniary  sacrifices.  .  .  . 


!    i 

ill 


ii  i^ 


I 


i 


LE  ZOLLVEREIN. 

{Resume  Statxstique.) 
From  Legoyt's  La  France  et  l'Stranger,*  Vol.  T.  pp.  250-5. 

LE  ZOLLVEREIN  (des  deux  mots  allemands  Zoll, 
douane,  et  Verein,  association)  est  le  nom  donnd  h, 
I'association  douaniere  qui  existe  a'  jourd'hui  entre  tons  les 
racmbros  de  la  Coufdddration  gormanique,  moins  TAutriche, 
Ics  trois  villes  Ansdatiqucs  (Bremc,  Hambourg,  et  Liibcck), 
le  Mccklembourg,  les  duchus  de  Ilolstein  et  du  Lauenbourg, 
et  la  principautd  de  Lichtenstcin.  La  Prusse  y  figure  meme 
pour  ses  provinces  placdcs  en  dehors  de  la  Confederation. 

Le  principe  do  cette  association  se  trouvc  dans  I'articlc  19  du 
traitd  qui  a  fondd  la  Confederation  germanique  et  qui  est  ainsi 
con^u :  "  Ses  mcmbres  se  rdservent,  c\  la  premiere  rdunion  de 
leurs  pldnipotentiaires  i  Francfort,  de  deliberer  sur  un  projet 

1  Osiander. 

2  Paris ;  Veuve  Berger-Levrault  et  fils,  1805. 


I 
1 


.nil 


les 

10, 


du 
nsi 

de 
)jet 


LE  ZOLLVEREIN. 


197 


de  douanes  et  de  navigation  pour  toute  rAllemagne."  Mais 
elle  trouvait  surtout  sa  raison  d'etre  dans  I'organisation  tcrri- 
toriale  et  politique  de  I'Allemagne,  composde  de  quarante  Etats 
presque  tous  enclaves  les  uns  dans  les  autrcs,  ayant  ehacun 
8CS  barriOres  fiscales  et  son  tarif.  On  a  conitd  que,  pour  par- 
vcnir  do  la  frontiere  au  centre  du  pays,  soit  du  nord  au  sud, 
soit  de  I'ouest  a  Test,  sur  un  espace  de  370  i\  445  kilometres, 
les  marchandises  n'avaient  pas  moins  de  seize  lignes  de  dou- 
anes ^  traverser,  non  compris  les  lignes  intdrieures  appar- 
tenant  ^  I'Etat,  aux  communes  et  meme  aux  particuliers ! 
De  h\,  des  frais  et  des  pertes  de  temps  dnormes,  qui,  en  les 
grevant  outre  mcsure,  arretaient  h,  la  fois  la  production  et 
la  consommation. 

La  Prusse,  dont  les  provinces  orientalcs  dtaient  sdpardes  du 
reste  de  la  monarchic  par  le  Hanovre,  le  Brunswick,  et  la 
IIesse-Cassel,etqui  souffrait  le  plus,peut-etrc,  de  ce  morcelle- 
ment  de  son  territoire,  prit  I'initiative  des  ndgociations  qui 
devaient  conduire  au  Zollverein  actuel.  Ses  ouvertures  furent 
d'abord  accueillies  par  le  Schwarzbourg-Sondersliausen,  I'une 
de  ses  enclaves;  puis,  de  1819  ^  1828, 1'association  naissante 
vit  successivcment  venir  h,  elle  les  principautds  ou  duchds  de 
Hesse-Darmstadt,  Schwarzbourg-Rudolstadt,  Saxc- Weimar, 
Anhalt-Bernbourg,  Anhalt-Dessau,  et  Anhalt-Coethcn,  soit 
pour  la  totalitd,  soit  pour  une  partie  de  leur  territoire.  Un 
certain  nombre  d'Etats  du  second  ordre,  ayant  &,  leur  tete  la 
Baviere  et  le  WUrtcraberg,  tenterent  d'enrayer  ce  mouvcment 
dans  Icquel  ils  voyaient  un  agrandissement  indirect  do  Tinflu- 
ence  politique  de  la  Prusse ;  mais,  convaincus  do  I'inutilitd 
de  Icurs  efforts  pour  constituer  unc  ligne  douaniore  de  quelque 
importance,  ils  se  rdunirent  au  Zollverein,  le  23  mars  1833. 
La  Saxe  suivit  leur  exemple,  le  30  mars  de  la  memo  annde, 
et  entraina  ^  sa  suite  les  Etats  de  la  Thuringc,  la  branche 
Ernestine  de  Saxe,  Schwarzbourg  et  Rouss.  Apres  de  longues 
lidsitations.  Bade  se  ddclara  pour  le  Zollverein  le  12  mai  1835; 
Nassau,  le  10  ddcembre  1835 ;  Francfort-sur-le-Mein,  le  25 
Janvier  1836 ;  la  principautd  de  Lippe-Detmold,  le  18  octobre; 
le  Brunswick,  le  19  octobre ;  la  Hesse-Electorale  et  le  comtd 
de  Schaumbourg,  le  13  novembre ;  le  comtd  de  Waldeck,  le  11 


II 


I 


'■I  sti 


.f,\ 


1  I  'I 


198 


ECONOMIC  HISTORY. 


ddccmbrc  1841;  Ic  duchd  de  Luxembourg,  Ic  8  fdvrior  1842; 
cnlin,  le  1"  Janvier  1854,  les  derniers  Etats  rest<J8  fideles  i\ 
I'association  du  Steuerverein,  c'est-^-dire  le  Hanovrc  ct  lo 
duclid  d'Oldenbourg, 

D'ai)ro3  le  receiisement  de  ddccmbre  1861,  la  population  do 
cliaquc  Etat  associd  s'^levait  aux  noinbres  ci-apres :  — 


I'russe .    .    . 

18,807,061 

Wiirtemberg  . 

1,V20-  78 

Oldonbourg 

238,502 

Luxembourg 

197,731 

Bade      .    .    . 

1,365,732 

Nassau     . 

454,320 

Biiviere     .     . 

4,095,424 

Ik'sse-Casscl  . 

710,080 

Fraucfort 

84,606 

Saxf  royale  . 

2,225,244 
1,069,821 

Hcsse-Darni- 
stadt  .    .    . 

874,231 

Tliuriiige 

Uanovre  .    . 

1,908,031 

Brunswick 

257,624 

Total    . 

84,670,277 

'I 


■ 

1 

't ' 

m  rillB 

J"  .,- 

■■!:' 

i 

m 

Ccs  34.6  millions  d'habitants  occupent  une  superficie  de 
502,260  kilometres  carriis. 

Le  Zollverein  n'est  pas  rest<5  commercialemcnt  isold.  D«5s 
sa  formation,  il  s'cst  cfl'orcd  d'agrandir  ses  dijbouchds  par  des 
traitds  avcc  les  principaux  Etats  do  I'ancien  et  du  nouveau 
mondc. 

Ces  trait(js  de  commerce  so  sont  succddd  dans  I'ordro  ci- 
aprcs:  avec  la  Hollande,  les  21  Janvier  1839  et  31  d(;cembrc 
1851;  avec  la  Porte,  le  19/22  octobre  1840;  avec  I'Angle- 
tcrre,  les  2  mars  1841  et  11  novembre  1857 ;  avcc  la  Belgiquc, 
les  1«'  scptombre  1844,  2  Janvier  1851,  ct  18  f(ivrier  1852 ; 
avec  la  Sardaignc,  les  23  juin  1845,20  mai  1851,  et  28  octobre 
1859;  avec  rAntriche,  le  19  fevricr  1853  (d'abord  avec  la 
Prusse  seulement,  puis  avec  le  Zollverein,  ct  plus  tard,  avec 
les  duchds  dc  Parme  et  de  Modene) ;  avec  le  Mexique,  le  30 
juillet  1855 ;  avcc  Ercme,  Ic  26  Janvier  1856 ;  avcc  la  Sicile, 
le  10  aoflt  1856 ;  avec  le  Danemark,  le  14  mars  1857  ;  avcc 
I'Autrichc  et  la  principautd  de  Lichtenstein  (convention  mond- 
taire),  le  24  Janvier  1857 ;  avec  la  Perse,  le  25  juin  1857 ; 
avec  la  confdddration  Argentine,  le  19  septembre  1857. 

L'influencc  de  ccs  traitds  sur  le  commerce  du  Zollverein  est 
clairemont  indiqude  par  le  tableau  suivant,  qui  en  fait  con- 
naitre,  de  1834  k  1860,  la  valeur  moyenne  annuclle  absolue 
et  par  tete  d'habitant.  Pour  la  pdriode  1834-1846,  cette  va- 
lour a  dtd  calcul^e  par  M.  O.  Hiibner  (Jahrbuch  pour  1860  et 


LE  ZOLLVEREIN. 


199 


1861'),  d'apr^a  des  prix  iuvariables ;  pour  les  autrcs  anndes, 
d'aprcs  Ics  prix  rdels.  Lea  sominca  aont  en  milliona  de 
francs. 


4 
P^rlodes  et  annies. 

a 

S 
•B 

1 

4i 

V  2 

If.' 

5.M.S 

5 

S 

111 
III 

1834-1838  . 
1839-1843  . 
1844-1846  . 
1860-1852  . 
1853  .     .     . 

477.0 

077.2 

813.4 

704.6 

764.0 

1,009.1 

1,184.2 

1,312.9 

1,327.5 

1,205.6 

691.0 

602.6 

655.1 

070.6 

042.7 

1,262.9 

1,157.2 

1,195.5 

1,324.1 

1,315.6 

219.0 
207.4 

aio.o 

3146 
3956 
457.5 
020.2 
550.9 
541.5 
419.2 

1,008.0 
1.339.9 
1,408  5 
1,375.1 
1,707.3 
2,202.0 
2,341.4 
2.508.4 
2,051.6 
2.521.1 

24.6 
20.7 
29.0 
30.2 
32.5 
32.6 
32.7 
33.0 
33.2 
33.5 

434 

60.2 
50.6 
46.5 
62.5 

1864 .    .    . 

09.2 

1865 .    .    . 

71.5 

1856.    .    . 
1867 .    .     . 

70.0 
79.9 

1868  .    .    . 

75.2 

D'apr^s  CO  tableau,  Thistoire  commercialo  du  Zollverein  a 
eu  trois  pliaaes  tres-distinctca.  La  premiere  comprend  la 
pdriodc  1834-1846 ;  c'est  peut-etre  la  plua  brillante.  La 
secondc  embrasse  lea  anndes  de  crise  1847  ^  1852.  La  troi- 
sieme,  commencde  en  1853,  se  continue  en  ce  moment ;  1857 
en  est  le  point  culminant.  Vient  ensuite  une  r<:;action  asaez 
sensible,  qui,  quoique  pcrdant  cliaque  jour  de  son  intensity, 
n'a  pas  encore  fait  place  i  une  recrudescence  bien  caractdr- 
isdc.  —  Les  deux  colqpncs,  importations  et  evportations,  in- 
diqucnt  la  correlation  intime  qui  exisfce  toujours  et  partout 
cntre  ces  deux  ei<jmcnts  du  commerce.  Infdrieures  pendant 
assez  longtemps  aux  premieres,  les  secondes  ne  tardcnt  pas  h 
les  <5galer  et  memo  h  les  ddpasscr  dans  ccrtaines  anndes.  Cost 
la  preuvc  du  rapide  ddveloppcmcnt  manufacturicr  de  I'associa- 
tion.  Par  suite  do  I'extension  graduelle  de  son  rdseau  do 
voics  ferrdes,  de  I'amdlioration  dc  ses  voies  navigables  et  do 
la  reduction  des  droits  de  transit  (aujourd'hui  supprimds), 
son  territoire  est,  en  outre,  cmpruntd  par  une  valeur  (calculde) 

1  On  Bait  que  les  droits  de  douane  du  Zollverein  sont  e'tablis  au  poids.  Les 
publications  officielles  ne  font  done  pas  connaitre  la  valeur  du  commerce  de 
I'association. 


I      (' 


200 


ECONOMIC  III  STORY. 


VkV^ 


m 


I'l. 


m 

m 

It 

i    .t'i\ 

m 
m 

•  M 


sans  ccssc  croissanto  do  marchandiscs.  No  pcrdona  pas  dc 
vue  toutcfoia  quo  la  valour,  surtout  la  valour  acfuelle,  no 
saurait  donnor,  particuliercmcut  dans  oos  dornicrcH  ann<;o8 
ou  Ics  prix  oni;  6t6  I'objot  d'uno  luui.sse  si  8(judaiuo  et  si 
rnpido,  la  mosurc  cxacto  du  mouvemcnt  dcs  (ichanges  ct  du 
transit  du  ZoUvoroin.  L'indication  des  quant ites  scrait  un 
documont  plus  prdcis ;  mais  olio  cxigurait  des  d(5voloppomcnt8 
qui  no  sauraiont  trouver  place  ici. 


D&iliaNATlON  PES   ARTICLI8. 


Toilesdefil 

Soieries  puree 

Soiories  iiiulnngdcs 

Lainii(;cs 

Fourriires  et  pelleteries     .    .    . 

Habits  (reiifantB 

Objots  en  f'er 

Objets  en  cuivre  et  laiton     .     . 

Objets  en  plonib 

Objets  en  zinc 

Objets  en  e'tnin 

QiilncRillerie 

Objets    en    pierre,    marbre,   et 

nutres  minernux 

Vaisselle  et  porcelaine  .    .    .    . 

Verre  et  vorrerie 

01)jet8  en  bois 

Objets  en  cuir 

Brosserie  et  boissellerie     .    .    . 
Objets  en  paiile,  en  ecorce,  etc. 
Papiers,  jeux  de  cartes,  papier 

de  tcnturc,  cartons    .... 

Frodiiits  cliimlques 

I'oiidre  a  tirer 

Savons    

Boufiies  et  chandellcs   .... 
Farines  et  prodiiits  farineux  .    . 

Sucre  rafflne 

J'au-de-vie 

Taliac 

Livres     

Iiistruinents 

Valeur  totale 


Importations. 


1834.    1814.    1837 


88.9 
34.1 
12.4 
2.6 
4.9 
0.2 
0.1 
2.2 
0.7 
0.04 

0.1 
1.9 

0.4 
1.5 
2.0 
1.1 
0.7 
0.1 
0.4 

0.4 
1.9 

0.1 
0.1 
0.1 
0.3 
0.3 
1.5 
4.9 
0.4 


164.9 


C1.5 
8.6 

14.6 
H.'J 

13.1 
0.1 
0.3 
5.2 
2.2 
0.04 

0.1 
3.7 

0.4 
1.5 
5.6 
2.6 
1.6 

0.7 

0.4 

2.6 

0.2 

0.1 

0,1 

0.2 
30.4 
13.1 

7.1 

0.4 


184.5 


78.4 

ltt.9 

33.0 

7.1 

22.6 

0.4 

0.2 

10.0 

30 

0.03 

0.1 

0.1 

1.4 

0.03 

0.1 

7.1 

4.5 

3.0 

0.01 

1.9 

1.1 

6.0 

0.1 
0.1 
4.9 
0.1 
22 
9.0 
8.6 
1.1 


223.9 


EZPORTATIONS. 


1834.     1844.    1837 


44.2 

88.1 
27.4 

7.9 
67.1 

0.4 

0.7 
12.7 

3.4 

0  04 
01 
18.4 

0.3 

3.7 

6.0 

7.9 

3.7 

0.04 

0.04 

4.5 
3.4 
0.1 
0.1 
0.1 
1.6 
1.1 
1.1 
5.2 
4.5 
1.5 


315.2 


40.5 

67.0 

40.1 

13.5 

W).0 

0.7 

1.5 

13.9 

3.0 

0.1 

0.1 

45.4 

1.1 
7.5 
3.7 
9.4 
1.9 
0.1 
0.1 

1.5 

4.9 

0.1 

0.04 

0.1 

1.1 

1.9 

1.9 

50 

0.0 

6.7 


305.4 


100.9 

55.5 

85.1 

18.0 

168.6 

1.9 

1.9 

18.0 

0.7 

0.4 

6.0 

0.4 

52.6 

0.3 

20.2 

18.0 

22.9 

7.1 

0.2 

0.3 

7.6 

16.9 

0.4 

0.2 

1.9 

1.3.6 

7.1 

36.2 

18.7 

16.9 

5.7 


698.9 


Lo  tableau  prdcddcnt  fait  connattrc  la  valour  dos  produits 
fabriquds  que  le  ZoUvorein  a  importds  et  exportds  en  1834, 


LE  ZOLLVEREIN. 


201 


1844,  ct  1857.  II  n'a  d'autro  but  quo  d'indiqucr  ccux  do  ccs 
|)roduit8  qui  sont  le  plus  habituoUomcut  consommos  ou  fab- 
riquda  daus  les  Etats  do  rUuion,les  ([uautitus  ayant  du  ndces- 
sairouicnt  s'cjlcvcr  avcc  lo  chitlrc  do  la  poitulatiou.  CVpoudant 
il  fournit  co  irnsuigucmout  important  et  indupondunt  du 
niouvcniont  do  la  population,  que,  tandis  que  los  importations 
no  HO  sont  aocrucs,  do  1834  i\  1857,  quo  do  3G  p.  100,  les 
exportations  out  plua  quo  doubld.  Cost,  cummc  nous  le 
disons  plus  haut,  le  signo  certain  dos  progrus  remaniuables 
do  I'industrio  manufacturiero  dans  I'association. 

La  signature  rdccntc  d'un  trait<i  do  commerce  et  do  naviga- 
tion entro  la  France  ct  la  Prussc,  traitd  en  co  moment  soumis 
^  rcxamon  dos  autrcs  fitats  do  I'association,  donne  un  intdret 
particulier  au  tableau  ci-apr6s,  relatif  a  nos  relations  com- 
mercialcs  avec  lo  ZoUverein.  11  a  dtd  dresse  d'apros  les  docu- 
ments francjais,  ct  indique  les  valours  actuelles  (en  millions 
do  francs).     II  so  rapporto  au  commerce  special. 


Importa- 

Exporta- 

Importa- 

E.iporta- 

AnniSca. 

tion!!  en 

tions  do 

Annies 

tion.'!  en 

tionx  (le 

Fruuce. 

France. 

France. 

France. 

1847 

52.7 

40.2 

1853    .... 

fln.9 

490 

1848 

2:!.0 

29.6 

1854    .... 

75.7 

646 

184!) 

32.3 

38.0 

1855   .... 

108  1 

fio.S 

1850 

30.2 

44.7 

1856  .... 

110.3 

89.7 

1861 

38.1 

44.1 

1857    .... 

120.7 

117.7 

1852 

48.3 

42.3 

1858   .... 

100  8 

147.7 

Les  importations  du  Zollvcrcin  en  France  portent  princi- 
palement  sur  dcs  matieres  premieres  de  I'industrio  (laines, 
bcstiaux,  houille,  coke,  bois,  pcaux  brutes,  poils).  Les  soie- 
ries  et  les  lainages  y  figurent  ccpcndant  pour  un  chiffro  assez 
(jlevd. 

Les  exportations  do  la  France  pour  Ic  Zollvcrcin  ont,  au 
contraire,  pour  objcts  principaux  dcs  produits  fabriquds, 
comme  les  soieries,  les  lainages,  les  vetcments  et  lingeries, 
les  cotonnades  imprimdes,  les  pcaux  ouvrdes,  les  fils  de  lainc, 
les  outils  et  instruments,  etc.  La  France  expddie  en  outre 
dans  le  ZoUverein,  quand  la  rdcolte  est  bonne,  dcs  quantitds 
assez  considdrables  de  vins  ordinaircs. 


'! 


!;  ■ 


K 


202 


ECONOMIC  HISTORY. 


H'il  fallait  jugcr,  d'apris  lo  mouvoincnt  do  la  navigation 
dans  Ics  ports  prussiens,  do  I'importanco  relative  du  com- 
merce du  Zollvorcin  avcc  Ics  divers  Etats  eurupdens,  c'est 
avec  I'Angleterro  qu'il  cntretiendrait  Ic  mouvcment  d'affaires 
le  plus  considerable.  Viendraient  cnsuite,  par  ordre  ddcrois- 
sant  de  trafic,  les  trois  royaumes  scandinaves,  la  Ilullande, 
les  portes  ansdatiques,  la  Franco,  la  llus.sie,  etc.  Mais  il  ne 
faut  pas  pcrdre  do  vue  qu'en  co  qui  conccrne  la  Franco,  la 
plus  grando  i)artie  do  son  conunerco  avcc  lo  ZoUverein  so 
i'ait  par  la  voie  de  terre. 

Les  recettes  des  douancs  du  ZoUverein  ont  oscilld  ainsi 
qu'il  suit  do  1834  Jt  1859  (nombrea  en  millions  do  francs). 


Anii(>ea. 

ImporUi- 
tiuii. 

Exporta- 
tluii. 

Transit. 

AuD6oa, 

Importa- 
tion. 

Exporta- 
tion. 

TniDilt. 

1834    .    . 

52.1 

1.5 

1.0 

1847    .     . 

100.0 

3.0 

1.5 

1836    .    . 

5!).0 

i.y 

1.0 

1K»8    .     . 

85.6 

1.6 

1.1 

1880    .    . 

(J.VO 

i.y 

1.9 

1H49    .     . 

88.0 

1.5 

1.9 

1837    .    . 

(13,7 

1.6 

2.2 

1850    .     . 

86.2 

1.1 

1.0 

1838    .    . 

72.4 

1.0 

1.0 

1861     .     . 

87.0 

1.1 

1.5 

1839    .    . 

73.1) 

1.9 

2.6 

1852    .     . 

01.1 

1.1 

1.6 

1840    .     . 

7(1.0 

1.9 

2.0 

1853    .     . 

82.6 

1.1 

1.9 

1841    .     . 

80.2 

1.6 

2.2 

1854    ,     . 

86.2 

0.7 

1.6 

1842    .    . 

86.5 

1.6 

2.2 

1855    .     . 

97.5 

0.7 

2.2 

1843    .    . 

02.6 

1.6 

2.2 

1856    .     . 

98.0 

0.7 

1.5 

1844    .    . 

06.0 

1.9 

2.0 

1857    .     . 

09.0 

0.7 

1.5 

1845    .     . 

101.0 

1.6 

1.6 

1868    .     . 

100.1 

0.7 

1.5 

1846    .    . 

90.6 

1.9 

1.1 

1859    .    . 

88.1 

0.7 

1.5 

Les  faiblcs  oscillations  du  produit  des  douanes  dopuis  1844 
constituent  lo  trait  saillant  do  co  tableau.  Toutefois,  cet  dtat 
h  pen  pros  stationnairc  des  recettes  ne  saurait  etre  \ntci'\n'6t6, 
en  presence  des  documents  qui  precedent,  comme  le  signc 
d'un  mouvement  d'affaires  peu  progrcssif.  11  ne  faut  pas 
pcrdro  de  vuc,  d'aillcurs,  quo  Ics  plus  grand  nombre  des  ma- 
tieres  premieres  ont  6t6,  en  1851  ot  depuis,  ou  completemcnt 
affranchies  ou  considdrablement  ddgrevds.  Les  droits  do 
transit  ont  dgalcment  6t6  I'objct  d'importantes  reductions 
jusqu'au  moment  do  leur  suppression  en  1861.  .  .  . 

En  1858  et  1859,  les  recettes  h  I'importation  (seulement), 
ramendes  k  100,000,  se  sont  rdparties  ainsi  qu'il  suit  cntrc  les 
Etats  qui  precedent  (Francfort-sur-le-Mein  non  compris)  ;  — 


Li:  ZOLLVEREIN. 


208 


I'ruaso 

liavii'ru      .... 
ilanuvro     .... 

811x0 

Wurteiiiber(<  .    .    . 

Uaile 

TlmriiiKo   .... 
lli>88u  ((irand-diiclic) 
Ht'Hso  (ftli'clorale)  . 
OMi-nbuurg    ,    .     . 

Nassau 

Bruiiawiuk      .     .    . 
Luxeinbuurg .     .    . 

Totaux    .    .    . 


IMflM. 


60,020 

64,021 

13,188 

13,022 

10.002 

10,321 

6,104 

6,980 

4,843 

4,701) 

3,808 

4,759 

2,075 

2,941 

2,400 

2,431 

2,068 

1,972 

1,208 

1,310 

1,242 

1,228 

713 

704 

64U 

642 

100,000 


1M30. 


100,000 


Voici  quelle  a  dtd  la  repartition  de  la  recctto  nctto  cntro 
les  divers  Etats,  de  1857  k  1851)  (valours  eu  millions  de 
franca) :  — 


1867. 

1868. 

1869. 

I'nur 
100. 

I'russe  .    .    . 
Haviuro      .    . 

•    • 

45,330,221 

11,036,200 

9,150,003 

5,282,801 

4,273,155 

3,359,430 

2,057.085 

2,147,583 

1,815,843 

1,154,000 

1,0!»0,125 

717,188 

033,020 

481,833 

40,408,492 

12,(i8!),373 

0,704,025 

5,702,(555 

4,007,72(5 

3,070,278 

2,898,435 

2,370,881 

1,983,858 

1,223,058 

1,107,142 

781,402 

001,882 

620,095 

30,770,540 

10,055,831 

7,909,578 

4,(577,101 

8,079,.308 

2,902,875 

2,300,415 

1,877,872 

1,522,751 

1,011,708 

948,247 

007,983 

618,051 

418,218 

50.77 
12.84 

Ilaiiovre    . 

10.18 

Saxe 

5.97 

Wurtcmberg . 
Bado      .    .    . 

4.70 
3  71 

f^tats  de  Tiiurin 
llesse  ((/raiul-di 
Ilosse  (Electoral 
Oldenbourg    . 
Nassau  . 

^0  .    . 
iclld)  . 
e).    . 

2.94 
2.40 
1.04 
1.29 
1.21 

Fraticfort-sur-le- 
Brunswick     , 
Luxeinbuurg  . 

Mein 

0.85 
0.70 
0.60 

Totaux    .... 

89,744,309 

97,938,002 

78,366,634 

100.00 

La  colonne  des  rapports  ccnt(5simaux  dcs  deux  tableaux 
qui  pr(3cedent,  appclle  tout  particulierement  I'attcntion  en 
indiijuant  les  Etats  qui  gagnent  ou  perdent  ^  I'association. 
Ainsl,  par  exemple,  la  Prusse,  qui  encaisse  58.82  p,  100  des 
rccettes  totales,  no  figure  que  pour  50.77  dans  la  repartition, 


m 


"^11 


'  "II 


■ '  '1; 


I 


it 


I 


MMMMMMMIm.' 


■ 


m 


4      ■'*■ 


I* 


204 


ECONOMIC  HISTORY. 


tandis  que,  pour  la  Baviere,  ces  rapports  sont  respectivement 
de  5.15  k  la  rccetto  et  de  12.84  h  la  repartition.  En  rdsumd, 
les  Etats  gagnants  sont  Ics  suivants :  Uaviere,  Hanovre,  WUr- 
tcmbcrg,  Ics  deux  Ilcsses,  la  Thuringe,  Oldenbourg,  ct  Nassau. 
La  Prussc,  lo  Luxembourg,  la  Saxe,  Bade,  Brunswick,  et 
Francfort-sur-le-Mciu  composent  la  serie  des  perdants.  Les 
parts  du  ZoUverciu  sont  ceux  de  la  Prusse,  du  ducli^  d'Oldcn- 
bourg  ct  du  Hanovre.  Les  documents  qui  suivent  indiqucnt 
le  mouvement  de  la  navigation  de  ces  ports  de  1856  ^  1859 
(grand  et  petit  cabotage  noii  compris). 

PORTS  PRUSSIENS. 


w 

'■f 


(!;'• 


ItATIHENTS. 

TONNEAOX.' 

BAtiments 

sua  LEST.2 

TONNEAOX. 

AKN&E8. 

Entr^. 

9,116 

8,i)22 
8  533 
7,682 

Scrtis. 

Eutr^9. 

Sortis. 

Entr^. 

Sortis. 

Entrcs. 

Sortis. 

1869      ..    . 

i>m    .  .  . 

1867      ... 
1866      ... 

9,197 
9,032 
8,441 
7,684 

1,471,522 
1,401,560 
l,f)S4.622 
1,337,746 

1,414.602 
1,469,582 
1,664,384 
1,374,416 

2,668 
2,.599 
3,052 
1,994 

1,743 
1,939 
1,229 
2,111 

4,'i2,846 
433,78s 
561,130 
381,860 

319,458 
401,614 
2.54,432 
380,310 

Dans  le  ducli(5  d'OIdenbourg,  la  navigation  a  6t6  en  1859 : 
a  I'entrde,  de  933  navircs  charge's,  jaugcant  78,484  lasts  et 
do  11  sur  lest,  jaugeant  879  lasts ;  h  la  sortie,  de  311  navires 
chargds,  jaugcant  88,295  lasts  et  de  502  sur  lest  avec  37,821 

PORTS  IIANOVRIENS. 


Navires  CaARofes. 

Navires  sdr  lest. 

Nombre, 

Lasts. 

Nombre. 

Lasts. 

^^•"^    •    ■   i  Sortie 
^^•"^    •        i  Sortie     .    . 

1,141 
1,092 

3,016 
1,194 

30,850 
29,270 

112,931 
36,459 

782 
899 

592 
2,470 

21,004 
32,964 

21,858 
100,281 

Les  avantagcs  purcment  mat<;ricls  du  Zollverein  pour  les 
^tats  intdressijcs  peuvent  se  rdsumer  ainsi  qu'il  suit :  1°  re- 

•  Le  tonneau  de  mer  pru8sien  =  OOS'.SO. 
'  Coraprls  dans  les  totaux  precedents. 


Ml: 

til! 


LE  ZOLLVEREIN. 


205 


duction  des  frais  de  perception  et  d'administration,  par  suite 
de  la  suppression  des  rayons  de  douanes  cutre  Ics  Etats  asso- 
ci^s ;  2°  rapidc  developpement  industriel,  par  suite  de  rap- 
plication  d'un  tarif  moderd ;  3°  elevation  du  cliiffre  primitif 
des  rccettcs  de  douane,  par  suite  de  raccroissemcut  de  con- 
somraation  resultant  de  I'application  do  ce  tarif;  4°  conclu- 
sion de  traitos  de  commerce  avantagcux  avec  Tetrangcr,  plus 
dispose  a  faire  des  concessions  a  un  Etat  qui  lui  oi'fre  un  de- 
bouche  consid(5rable  qu'i\  des  pays  sans  importance ;  5°  usage 
gratuit  on  ?i  des  conditions  tres  moderdcs  des  grandcs  voies 
de  communication,  terrestres,  fluvialcs,  ou  maritimcs,  qui  n'ex- 
istaient  auparavant  qu'au  profit  d'un  ou  de  quelqucs-uns  d'entre 
eux ;  G°  rapide  essor  de  certaincs  industries  indigenes,  aux- 
quellcs  la  libre  ouverture  d'un  marchd  int<;rieur  de  33  mil- 
lions d'habitants,^  ainsi  que  I'usage  en  franchise  de  matieres 
premieres  fournies  par  I'un  ou  I'autre  des  Etats  associds  et 
autrefois  frappdes  de  droits  de  douane,  permcttent  de  pro- 
duirc  plus  dconomiqueraent ;  7°  creation  d'une  forte  marine 
marchaudc. 

L'institution  du  Zollverein  a  eu  des  avantages  correspond- 
ants  pour  le  commerce  dtranger.  xVu  lieu  d'avoir  a  traverser 
40  lignes  douaniercs,  ddfenducs  par  des  droits  plus  ou  moins 
compliquds,  plus  ou  moins  dlcvds,  et  appliques  par  des  ad- 
ministrations plus  ou  moins  tracassieres,  il  s'cst  trouvd  en 
face  d'un  pays  unique,  recevant  ses  produits  a  des  conditions 
rclativcmout  moddrdcs.  Au  lieu  d'avoir  &,  traitor  avec  des 
consommatcurs  pcu  aisds,  rcstreignant  Icnrs  ddpcnscs  au  plus 
strict  ndccssaire,  il  a  profitd  du  developpement  do  la  riclicsse 
publique  dans  le  Zollverein  dcveuu,  apres  quelqucs  aundcs, 
un  grand  pays,  non-sculement  par  le  tcrritoire  et  la  popula- 
tion, mais  encore  par  le  bicn-etre  croissant  do  sa  population. 

Le  Zollverein  n'cst  cepcndant  pas,  dans  son  organisation 
et  ses  rdsultats  actucls,  la  fornuilc  la  plus  complete,  la  jjIus 
heUiCuse  du  principe  de  I'association  commcrciale.  Le  mode 
compliqud  de  ses  adlibdrations  ;2  la  dillicultd,  pour  ses  raembres, 


Id  4 


n 
n 


11 


♦r 


-1 


1  D'aprc's  le  do'nombromont  do  1861  clont  les  rc'sultats  ofBciels  nous  arrivcnt 
en  ce  moment,  de  34,705,694  habitants. 

'''  On  salt  que  toutes  les  deliberations  du  Zollverein,  pour  utre  valablcs. 


H'           ' ! 

^H  > 

I B     ^=!i 

1  '..% 

% 


MM 


206 


ECONOMIC  HISTORY. 


V 


H 


w' 


d'arriver,  sur  les  questions  lea  plus  graves,  k  une  solution  favo- 
rable aux  int<5rets  souvent  tres  oppos<is  qu'ils  reprdsentent ; 
les  influences  politiques  qui  s'agitcnt  dans  son  sein  et  I'em- 
pechent  de  discerner  toujours  clairement  la  voie  h  suivre 
pour  tirer  de  I'union  les  r<isultats  dconoiniques  les  plus  con- 
sid(5 rabies,  telles  sont  les  justes  critiques  dont  il  a  souvent 
6t6  I'objet.  On  pout  encore  lui  reprochcr  do  maintenir, 
malgrd  I'exemple  de  I'Angleterre  et  de  la  France,  des  droits 
qui,  pour  certains  produits  fabriquds,  depasscnt  tres-sensible- 
mcnt,  par  le  fait  de  la  diminution  considerable,  depuis  la 
formation  du  ZoUvcrein,  du  prix  des  produits  grev^is,  cette 
moyenne  de  10  p.  100  de  la  valeur,  destinde,  d'apres  lo  pro- 
gramme de  I'association  a  son  ddbut,  a  devenir  la  base  de  son 
tarif.  Cette  protection  exagerde  est  une  double  faute,  d'abord 
parce  que  les  consommateurs  de  I'association,  moins  aises  que 
ceux  des  deux  pays  que  nous  vcnons  de  citer,  sont  moins  en 
dtat  de  payer  des  prix  dlevds ;  puis,  parce  que  Ic  Zollverein, 
par  les  perfectionnemcnts  introduits  dans  ses  procddds  de 
fabrication  et  le  bas  prix  de  la  main-d'oeuvre,  est  aujourd'hui 
tout  a  fait  en  mcsure  de  lutter  cfficacement  centre  la  con- 
currence dtrangere.     1862. 

doivent  Ctre  prises  h.  runnnimite.  Ainsi,  dans  ces  deliberations,  la  Priisse 
ne  pcse  pas  d'un  plus  grand  poids  que  Francfort-sur-le-Mein  avec  ses  80,000 
habitants!  ... 


t  (5 


u 

•ft 


W' 


THE  CORN  LAWS. 


207 


IX. 

THE  CORN  LAWS,  1801-1849. 

From  Levi's  History  of  British  Commerce,^  2d  Ed. 

PART  III.  — CHAP.  7. 

THE  corn  laws  had  long  been  a  bone  of  contention  in 
England.  Maintained  for  the  interest  of  a  class  who 
clung  to  them  as  their  anchor  of  safety,  they  had  always  been 
attacked  as  an  obstacle  to  the  well-being  of  the  middle  and 
lower  classes.  In  the  opinion  of  their  advocates,  protection 
was  necessary  in  order  to  keep  certain  poor  lands  in  cultiva- 
tion, and  to  encourage  the  cultivation  of  as  much  land  as 
possible  in  order  to  provide  for  the  wants  of  the  country. 
Let  the  cultivation  of  such  lands  cease,  they  said,  and  we 
shall  be  dependent  on  foreigners  for  a  large  portion  of  the 
people's  food.  Such  dependence,  moreover,  may  bo  fraught 
with  immense  danger,  inasmuch  as,  in  the  event  of  war,  the 
supplies  may  be  stopped  or  our  ports  may  be  blockaded,  the 
result  of  which  may  be  famine,  disease,  or  civil  war.  Ac- 
cording to  the  defenders  of  protection  it  was  the  advantage 
gained  by  the  corn  laws  that  enabled  landed  proprietors  and 
their  tenants  to  encourage  mnnufacturos  and  trade.  Abolish 
the  corn  laws  and  half  the  country  sho])kecpers  will  be 
ruined,  mills  and  factories  will  be  stop|)0(l,  large  numbers  of 
the  working-classes  will  be  thrown  out  of  work,  disturbances 
will  ensue,  capital  will  be  withdrawn,  and  no  one  dare  ven- 
ture to  say  what  may  be  the  fatal  consequences. 

In  1801  the  price  of  wheat  reached  the  high  limit  of  155s. 
a  quarter,  and  we  may  well  imagine  what  sufferings  that 
price  entailed  among  the  people,  at  a  time  especially  when 

1  London:  John  Murray,  1880. 


>-,i|! 


'i 


I 


n 


P 


tMki 


J 


'•^ 


208 


ECONOMIC  HISTORY. 


trade  and  manufacture  were  so  much  paralyzed  by  the  Con- 
tinental war.  Happily,  for  two  or  throe  years  afterwards,  a 
succession  of  good  harvests  changed  the  condition  of  things, 
and  in  March,  1804,  the  price  of  wheat  fell  to  49s.  M.  per 
imperial  quarter.  But  what  was  anxiously  desired  by  the 
people  was  regarded  a  great  disaster  by  the  agricultural  in- 
terest. They  comjjlained  that  with  the  high  cost  of  produc- 
tion, in  consequence  of  high  wages,  high  rate  of  interest, 
and  the  heavy  cost  of  implements  of  husbandry,  they  could 
not  afford  to  sell  at  such  prices.  Meetings  were  held 
throughout  the  country  to  consider  the  case  of  the  farmers. 
Mr.  Westci-n  brought  the  state  of  agriculture  before  the 
House  of  Commons,  and  a  committee  was  apj)ointed  on  the 
subject.  The  farmers  contended  that  at  a  time  when  all 
foreign  supplies  were  shut  out  from  our  markets,  and  when 
we  were  more  than  ever  depending  on  home  production,  it 
was  the  bounden  duty  of  the  legislature  to  pass  laws  which 
would  encourage  the  production  of  grain  at  homo,  so  that 
the  nation  might  be  as  much  as  possible  independent  as  re- 
gards the  first  necessaries  of  life.  Unfortunately  all  the 
measures  hitherto  taken  for  the  protection  of  the  farmers 
resulted  only  in  the  aggravation  of  the  sufferings  of  the 
peoi)]e.  It  was  easy  by  means  of  prohibitions  and  bounties 
to  raise  the  price  of  corn  and  to  give  an  artificial  stiuuilus  to 
agricultural  prosperity,  but  the  people  were  not  able  to  buy 
bread  at  famine  prices,  especially  at  a  time  when  tuxes  were 
so  heavy.  The  report  of  the  committee  of  the  House  of 
Commons,  presented  the  same  session  in  1804,  was  to  the 
effect  that  the  price  of  corn  from  1791  to  the  harvest  of  1803 
had  been  very  irregular,  but  that  upon  an  avenige  it  had  in- 
creased in  a  great  degree  in  consequence  of  the  years  of 
scarcity,  and  had  in  general  yielded  a  fair  profit  to  the 
grower.  Tt  appeared  to  the  committee,  moreover,  that  high 
prices  had  the  effect  of  stimulating  agricultural  industry  in 
bringing  into  cultivation  large  tracts  of  waste  lands,  and 
that  this  fact  combined  with  the  abundance  of  the  two  last 
productive  seasons,  and  other  causes,  occasioned  such  a  de- 
pression in  the  value  of  grain  as  would  tend  to  the  discour- 


1 


THE  CORN  LAWS. 


209 


ngement  of  agriculture,  unless  maintained  by  the  support  of 
Parliament.  Nor  was  there  much  difficulty  in  persuading 
the  legislature  to  give  liccd  to  such  recommendations.  Very 
soon  after  the  'presentation  of  the  report  a  corn  law  was 
passed,^  which  imposed  a  duty  of  2-4s.  M.  per  quarter  on 
wheat  so  long  as  the  price  of  the  home  market  should  be 
under  GSs. ;  of  2s.  Qd.  so  long  as  the  price  should  be  at  or 
above  that  rate,  and  under  66s. ;  and  of  6t?.  a  quarter  when 
the  price  should  be  above  that  rate.  It  does  not  appear, 
however,  that  the  fear  entertained  by  the  farmers  and  the 
agricultural  interest  had  been  very  substantial,  for  in  the 
same  year  the  harvest  was  deficient  in  quantity  and  inferior 
in  quality,  and  all  apprehensions  that  bread  might  become 
too  cheap  were  entirely  out  of  the  question.  A  proposal,  in- 
deed, was  made  to  encourage  the  growth  of  corn  in  Great 
Britain,  and  yet  to  diminish  the  price  thereof  for  the  benefit 
of  the  people  by  exempting  farmers  from  all  direct  taxes. 
But  such  a  plan  would  have  only  transferred  the  burden  from 
one  class  to  another.  The  time  had  not  yet  arrived  for 
acting  on  the  "laissez-faire"  principle.  Artificial  aid 
was  sought  for  on  all  sides,  and  that  always  ended  in 
disappointment. 

At  the  conclusion  of  the  French  war,  in  1815,  precisely  the 
same  state  of  matters  arose  as  in  1804.  By  the  opening  of 
the  ports,  wheat  which  hitherto  averaged  £5  10s.  a  quarter 
suddenly  fell  to  £3  5s.,  and  immediately  the  farmers  raised 
a  cry  of  distress.  Again  a  co.nmittce  of  the  House  of  Com- 
mons was  appointed  to  inquire  into  the  state  of  the  law 
affecting  the  corn  trade,  and  once  more  the  legislature  was 
engaged  in  framing  a  corn  law,-  which  resulted  in  an  act 
prohibiting  the  importation  of  wheat  when  the  price  was 
under  80s.,  and  rendering  it  free  when  above  80s.  Yet 
serious  misgivings  existed  as  to  the  ultimate  effect  of  the 
restrictive  legislation  respecting  corn  in  the  minds  of  raanj-, 
and  in  the  very  House  of  Lords,  Avhich  traditionally  stood 
in  bold  defence  of  a  protective  policy,  protests  were  lodged, 

1  44  Geo.  III.  c.  109. 

a  55  Geo.  III.  c.  26. 

14 


x-%i 


,  I 


'1  (- 


I 


Mr     I  H 


ft:!' 


I 


210 


ECONOMIC  HISTORY. 


which  indicated  the  existence  of  a  more  enlightened  opinion 
on  the  real  bearings  of  the  whole  question.  Lord  Grenville 
and  his  compeers  protested  against  this  new  corn  law,  be- 
cause they  were  adverse  in  principle  to  all  new  restraints  in 
commerce,  deeming  it  most  advantageous  to  public  prosper- 
ity to  leave  uncontrolled  the  free  current  of  national  indus- 
try. In  their  opinion  "the  great  practical  rule  of  leaving 
all  commerce  unfettered  applied  more  peculiarly,  and  on 
still  stronger  grounds  of  justice  as  well  as  of  policy,  to  the 
corn  trade  than  to  any  other.  Irresistible,  indeed,  must  be 
that  necessity  which  could,  in  their  judgment,  authorize  the 
legislature  to  tamper  with  the  sustennnce  of  the  people,  and 
to  impede  the  free  purchase  and  sale  of  that  article  on 
which  depends  the  existence  of  so  large  a  portion  of  the 
community.  They  thought  that  expectations  of  ultimate 
benefit  from  any  corn  law  were  founded  on  a  delusive  theory. 
They  could  not  persuade  themselves  that  such  a  law  would 
ever  contribute  to  produce  plenty,  cheapness,  or  steadiness 
of  price.  So  long  as  it  operated  at  all,  its  effects  must  be 
the  opposite  of  these.  Monopoly  is  the  parent  of  scarcity, 
dearness,  and  uncertainty.  To  cut  off  any  of  the  sources  of 
supply  can  only  tend  to  lessen  its  abundance.  To  close 
against  ourselves  the  cheapest  market  for  any  commodity 
must  enhance  the  price  at  which  we  purchase  it.  A.nd  to 
confine  the  consumer  of  corn  to  the  produce  of  his  own  coun- 
try is  to  refuse  ourselves  the  benefit  of  that  provision  which 
Providence  itself  has  made  for  equalizing  to  man  the  varia- 
tions of  climate  and  of  seasons.  But  whatever  might  be  the 
future  consequences  of  that  law  at  some  distant  and  uncer- 
tain period,  they  were  convinced  that  these  hopes  must  be  pui-- 
chased  at  the  expense  of  a  great  and  present  evil.  To  compel 
the  consumer  to  purchase  corn  dearer  at  home  than  it  might 
be  imported  from  abroad  was  the  immediate  ])ractical  effect 
of  the  law  just  passed.  In  this  way  alone  could  it  operate. 
Its  present  protection,  its  promised  extension  of  agriculture 
must  result  (if  at  all)  from  the  profits  which  it  created  by 
keeping  up  the  price  of  corn  to  an  artifical  level.  These  fut- 
ure benefits  were  the  consequences  expected,  though  they  con- 


-■■■ 

,. 

fe,,". 

iHllni 

■V 

1 

-.)-'  ■- 

. .  1 

j 

il 

>x 

'1 

i 

(.' 

i^ 

u 

( V 

THE  CORN  LAWS. 


211 


I 


fidently  believed  erroneously  expected,  from  giving  a  bounty 
to  the  grower  of  corn  by  a  tax  levied  on  its  consumers." 
Such  were  the  reasons  urged  against  the  corn  law  of  1815, 
and  certainly  they  do  honor  to  those  who  recorded  them  in 
the  journal  of  the  House.  But  many  a  year  was  to  pass  ere 
the  protests  of  the  few  did  become  the  deliberate  conviction 
of  the  entire  community. 

For  twelve  years  nothing  further  occurred  on  the  subject 
of  the  corn  laws  except  the  emission  of  repeated  cries  of 
distress  by  the  agricultural  classes,  especially  in  the  House 
of  Lords.  The  country  was  indeed  learning  by  bitter  ex- 
perience how  direct  is  the  relation  between  dear  bread  and 
bad  trade,  and  t^o  time  arrived  when  the  working  of  the 
corn  law  was  to  be  laid  before  the  legislature.  "  The  corn 
laws,"  said  Mr.  Wliitmore,  "have  inflicted  the  greatest  in- 
jury upon  the  general  trade  of  the  world  that  ever  perhaps 
was  ))roduced  by  injudicious  legislation.  They  have  de- 
ranged its  course,  stagnated  its  current,  and  caused  it  to 
flow  in  new  and  far  less  beneficial  channels  than  it  formerly 
occupied."  To  the  corn  laws  he  attributed  the  great  and 
ruinous  fluctuation  of  prices,  which  is  the  inevitable  result 
of  a  system  of  restriction.  "  The  more  the  basis  from  whence 
your  supplies  are  drawn  is  widened,  the  greater  the  steadi- 
ness of  prices ;  the  more  it  is  narrowed  the  more  constant  and 
the  more  fatal  is  their  effect  on  the  fluctuations  to  which  you 
are  subject.  In  the  early  times,  when  there  was  a  difliculty 
iu  the  conveyance  of  bulky  commodities  from  one  part  of  the 
country  to  another,  arising  from  want  of  roads,  when  there 
existed  a  prejudice  as  well  as  a  legal  penalty  against  what  was 
called  forestalling  and  regrating,  the  fluctuations  in  prices 
were  immense.  And  the  same  holds  good  as  regards  other 
times  and  other  countries."  Lord  Lauderdale  himself,  while 
entertaining  considerable  fear  of  foreign  competition,  clearly 
showed  what  are  the  solid  and  what  arc  the  fictitious  ways 
to  agricultural  prosperity.  "I  will  take  upon  myself,"  he 
said,  "  to  assert  that  if  there  is  any  one  proposition  in  politi- 
cal economy  which  may  be  affirmed,  it  is  this,  that  the 
interests   of  landlords   properly  understood  are   absolutely 


\  '\% 


Ul 


wh 

u 


212 


ECONOMIC  HISTORY. 


f 


identified  with  the  general  interests  of  the  country.  Land- 
lords have  no  interest  in  high  prices;  high  prices  raise  rents 
nominally  and  in  appearance;  and  now  and  then  some  tem- 
porary advantage  may  bo  obtained  from  them,  for  which 
landlords  will  always  ))ay  afterwards  with  more  than  com- 
l)oiind  interest;  but  rents  can  only  be  raised  largely,  perma- 
nently, and  beneficially  to  landlords  by  one  of  two  causes, 
both  of  which  arc  equally  conducive  to  the  prosperity  of  all 
other  classes;  first,  by  improvements  in  agriculture,  which 
leave  a  larger  suri)liis  produce  after  the  expenses  of  cultiva- 
tion arc  defrayed ;  and  secondly,  by  improved  and  extended 
markets.  Now  all  improvements  of  agrlcultui-c  which  in- 
crease the  surplus  i)roduce  of  the  country  are  obviously  a 
direct  addition  to  the  public  wealth.  And  how  are  markets 
im])roved  and  extended  ?  By  new  communication,  — roads, 
railways,  canals, — but  principally  by  the  continual  rise 
and  increase  of  large  towns  within  our  own  empii'o,  rendered 
rich  and  prosperous  by  thriving  manufactures,  and  l)y  all  the 
improvements  in  skill  and  machinery  connected  with  such 
establishments.  The  best  job  for  the  landlord  is  the  ))ros- 
perity  of  trade  in  all  its  branches,  as  the  best  job  for  trade 
is  a  prosperous  state  of  agriculture.  There  is  nothing  to 
make  the  inhabitant  of  the  town  and  the  cultivator  of  the 
soil  jealous  of  each  other;  quite  the  contrary,  for  the  more 
each  pi-oduces,  the  more  he  will  have  to  exchange  for  the 
other;  and  this  is  the  foundation  of  the  great  internal  trade 
which  is  worth  one  hundred  times  more  than  all  the  foreign 
commerce  of  the  country  put  together." 

Yet  notwithstanding  the  enunciation  of  these  truths  the 
farmers  clung  tenaciously  to  protection;  and  it  was  not 
without  a  great  struggle  that  they  allowed  the  corn  laws  to 
be  relaxed  to  a  small  extent.  In  the  session  of  1827  resolu- 
tions were  passed  in  the  House  of  Commons  to  the  effect 
that  corn  should  be  allowed  to  be  imported  free  of  duty,  in 
order  to  be  warehoused,  and  that  it  should  be  admissible  for 
home  consumption  at  a  shilling  jicr  quarter  duty  when  the 
price  of  wheat  should  be  70.s.,  and  at  two  shillings  more  for 
every  shilling  that  the  price  fell   below  70s.    per   quarter. 


THE   CORN  LAWS. 


213 


Tlicsc  resolutions,  however,  made  no  progress  in  conse- 
quence of  the  change  of  government.  The  following  session 
the  House  of  Couunons  passed  other  resolutions  to  the  effect 
of  imposing  a  sliding  scale  from  23«.  per  (piarter  when  the 
price  of  wheat  should  be  04s.,  and  IGs.  8t^.  when  the  price 
should  be  G9s.,  to  one  shilling  per  quarter  when  the  price 
should  be  at  and  above  TSs.  per  quarter.  And  upon  these 
bases  a  new  corn  law  was  passed,^  which,  like  its  predeces- 
sors, did  not  long  remain  in  force. 

It  was  ten  j'ears  after  the  passing  of  this  first  sliding 
scale,  or  on  March  15,  1838,  that  Mr.  Villiers,  seconded  by 
Sir  William  Molesworth,  first  commenced  his  attack  on  the 
polic}'  of  the  corn  laws  in  the  House  of  Connnons,  though 
with  little  effect.  In  those  days  political  economists  were 
simply  allowed  to  speak  and  complain.  Their  opinions 
were  received  as  mere  speculative  theories,  their  recom- 
mendations were  deemed  as  far  beyond  the  reach  of  practical 
statesmanship.  There  was  only  one  minister  present  when 
Mr.  Villiers'  motion  was  made,  and  as  might  have  been  ex- 
pected, it  was  lost  by  an  oA'erwhelming  majority.  But  about 
that  time  a  lecture  was  advertised  to  be  delivered  at  Bolton, 
the  birthplace  of  Arkwright  and  Crompton,  on  the  corn 
laws,  by  a  person  quite  a  stranger  to  the  town.  It  was  a 
new  subject  for  a  lecture,  and  as  the  public  mind  was  di- 
rected to  the  question,  the  lecture  drew  a  fair  number  of 
hearers.  Thd  lecturer,  however,  found  only  when  it  was  too 
late  that  it  was  not  easy  to  deal  with  economic  questions 
before  a  mixed  audience,  and  he  completely  broke  down. 
The  audience,  not  prepared  for  the  disappointment,  became 
impatient  and  vociferous,  and, a  riot  was  impending,  when  a 
youth,  a  medical  student,  rushed  to  the  platform,  and  on  the 
spur  of  the  moment  addressed  the  people  on  the  subject  in  a 
vigorous  and  manly  manner.  The  people  were  delighted  at 
this  turn,  and  Mr.  Paulton  won  for  himself  enthusiastic 
admiration.  On  the  news  of  such  an  event  travelling  to  the 
neighboring  towns,  the  volunteer  lecturer  was  overwhelmed 

1  9  Geo.  IV.  c.  38. 


i| 


■'111 


^'3 


wf^immm 


¥   ilil 


214 


ECONOMIC  HISTORY. 


with  invitations  to  redeliver  liis  address,  and  everywhere  ho 
captivated  the  audience  with  his  elociuent  attacks  on  monop- 
oly and  monopolists. 

As  the  interest  in  the  (picstion  of  the  corn  laws  grew  and 
extended,  it  became  evident  that  a  special  and  more  ])opular 
agency  was  wanted  for  the  purpose,  and  thus  in  October  of 
1838  eight  *  men  first  united  themselves  with  a  view  to  estab- 
lish an  Anti-Corn  Law  Association.  The  list  of  the  provi- 
sicmal  committee  was  afterwards  increased  to  thirty-seven, 
conspicuous  among  them  being  John  Bright,  George  Wilson, 
and  Richard  Cobden.  And  the  object  of  the  association  was 
declared  to  bo  to  form  a  fund  in  order  to  diffuse  information 
by  lectures  or  pamj)hlet8  on  the  bearing  of  the  corn  laws,  to 
defray  the  ex))ense  of  petitioning,  and  above  all  to  create  an 
organization  to  l)ring  numbers  to<.i  ther  in  such  force  and 
with  such  energy  of  purpose  as  to  secure  the  great  object, 
namely,  the  complete  freedom  of  trade  and  the  destruction 
not  only  of  the  corn  monopoly,  but  of  all  the  other  monopolies 
bolstered  up  by  this  monster  grievance.  Small  was  the  sup- 
port at  first  obtained  by  this  new  association.  Very  few  then 
appreciated  its  great  moral  imi)ortanco.  "For  the  first  two 
or  three  years  of  our  agitation,"  said  Mr.  Cobden,  "it  was  a 
very  hopeless  matter,  and  there  was  no  ^clat  nor  a))plause. 
.  .  .  We  sat  in  a  small  room,  and  we  had  a  dingy  red  curtain 
drawn  across  the  room  that  we  might  not  be  chilled  by  the 
paucity  of  our  numbers.  Two  or  three  were  all  that  were 
here  (Newall's  Buildings)  on  one  occasion,  and  I  recollect 
saying  to  my  friend  Prentice,  'What  a  lucky  thing  it  is 
the  monopolists  cannot  draw  aside  that  curtain  and  see  how 
many  of  us  there  are,  for  if  they  could  they  would  not  be 
much  frightened. ' "  It  was  not  long,  however,  ere  the 
small  association  began  to  manifest  its  power  and  influence, 
and  when,  aided  by  the  powerful  support  of  some  at  least  of 
the  leading  journals,  its  voice  resounded  through  the  length 

>  The  original  founders  of  the  Leaguo  were  John  Benjamin  Smith,  Archi- 
bald Prentice,  Richard  Cobden,  Thomas  Bazley,  William  Rawson,  W.  U.  Cal- 
lender,  Henry  and  Edmund  Ashworth.  (See  "  Cobden  and  the  League,"  by 
Henry  Ashworth,  Esq.) 


THE  CORN  LAWS. 


216 


f 


and  breadth  of  the  land.  Meetings  and  conferences  then  suc- 
ceeded each  other.  From  the  mauufacturinpf  districts  tho 
movement  spread  to  tho  metropolia,  and  with  a  clearly  defined 
purpose  in  view,  and  with  tho  highest  economic  authorities 
to  ajjpcal  to- in  support  of  their  principles,  tho  Anti-Corn  Law 
agitators  made  everywhere  a  profound  and  lasting  imjjression. 
On  March  12,  1839,  Mr  Villiers  again  brought  the  subject 
of  the  corn  laws  before  the  House  of  Connnons,  now,  how- 
ever, backed  by  a  strong  party  both  inside  and  outside  tho 
House.  His  motion  was,  "That  this  House  resolve  itself 
into  a  committee  of  the  whole  House,  to  take  into  considera- 
tion the  act  9  George  IV.,  regulating  the  importation  of  for- 
eign grain."  Mr.  Villiers  showed  that  the  corn  laws  were 
not  benclicial  to  tho  agricultural  interest,  and  that  neither 
the  agricultural  laborer  nor  the  farmer  reaped  from  them 
any  benefit.  He  asserted  that  the  community  at  large  suf- 
fered a  loss  through  the  corn  laws,  equal  to  a  poll  tax  of  8«. 
a  head,  or  a  tax  of  £2  on  each  family  in  the  kingdom,  and 
he  demonstrated  that  commerce  and  shipping  were  greatly 
injured  by  them.  Mr.  Villiers'  motion  was  seconded  by  Sir 
George  Strickland,  and  on  his  side  spoke  Mr.  Poulett 
Thomson,  Sir  William  Molosworth,  Mr.  Groto,  Mr.  Clay, 
Lord  Howick,  Sir  Henry  Parnell,  Mr.  Ward,  Lord  John 
Russell,  Mr.  Hume,  Mr.  Fieldon,  and  Mr.  O'Connell ;  while 
against  him  were  Sir  James  Graham,  Sir  Robert  Peel,  and 
a  host  of  Conservatives.  The  discussion  was  animated  and 
well  sustained,  and  after  five  whole  nights'  debate  the  votes 
wore  taken  and  the  motion  was  lost  by  195  to  342.  In  the 
House  of  Lords  too  a  discussion  was  commenced  on  tho  sub- 
ject. On  March  14  the  Earl  of  Fitzwilliam  moved,  "That 
the  act  9  George  IV.  c.  60,  entitled  '  An  Act  to  amend  the 
law  relating  to  the  importation  of  corn, '  has  failed  to  secure 
that  steadiness  in  the  price  of  grain  which  is  essential  to 
the  best  interests  of  the  country ; "  but  the  motion  was  lost 
by  24  against  224.  A  day  after  Lord  Brougham  moved, 
"That  this  House  do  immediately  resolve  itself  into  a  com- 
mittee of  the  whole  House,  to  take  into  consideration  the 
importation  of  foreign  corn. "     But  the  motion  met  a  similar 


'in 


m 

i 

m 


ml 


216 


ECONOMIC  HISTORY. 


i'atc,  only  7  having  voted  for  it,  and  01  against  it.  Slow  is 
the  progress  of  any  nioasuro  in  the  Iloimo  of  Commons  whon 
any  substantial  reform  is  contcMnplutod,  Imt  slower  still  is 
its  tidvunce  in  tho  House  of  Lords.  Coming  less  in  contact 
with  the  mass  of  the  jicople,  comparatively  strangers  to  their 
feelings  and  wants,  conservative  by  interest  and  liercditary 
policy,  tho  peers  of  the  realm  are  necessarily  the  last  to  ad- 
mit the  need  of  change,  and  the  last  to  make  concessions  to 
the  altered  exigencies  of  the  times.  Nevertheless,  there  have 
never  been  wanting  enlightened  members  in  the  Upper  Ilonsc 
who  sought  the  maintenance  and  preservation  of  their  order 
from  that  same  law  of  progress  on  which  all  the  institutions 
of  the  realm  depend,  and  who,  far  from  regarding  their  in- 
terests as  antagonistic  to  those  of  other  classes  of  society,  had 
the  wisdtmi  to  discern  that  wo  are  all  suijject  to  the  same 
laws,  influenced  by  the  same  circumstances,  and  alike  bound 
to  obey  those  laws  of  nature  which,  more  than  any  human  con- 
trivance, determine  the  progress  and  prosperity  of  States. 

The  result  of  Mr.  Villiers'  motion  in  the  House  of  Com- 
mons was  not  likely  to  discourage  the  Anti-Corn  Law  Asso- 
ciation. On  the  contrary,  it  imparted  to  it  a  m)\v  life  and 
a  fresh  impulse.  Determined  to  persevere  till  the  end,  the 
agitators  saw  in  the  strength  of  their  opponents  only  an  ad- 
ditional cause  for  more  energetic  labors.  A  meeting  was 
accordingly  organized  in  London,  and  the  same  voice  which 
first  gave  strength  and  vivacity  to  the  Manchester  gathering 
was  now  heard  exclaiming,  *'  Wo  are  the  representatives  of 
three  millions  of  people,  — a  far  greater  number  of  constitu- 
ents than  the  House  ever  could  boast  of.  We  well  know  that 
no  great  principle  was  ever  indebted  to  Parliament  for  success ; 
the  victory  must  be  gained  out  of  doors.  The  great  towns  of 
Britain  have  extended  the  right  hand  of  fellowship  to  each 
other,  and  their  alliance  will  be  a  Hanseatic  league  against 
the  feudal  corn-law  plunderers."  The  Anti-Corn  Law 
League  was  never  a  political  organization.  For  years  its 
members  went  on  lecturing,  distributing  tracts,  and  acting 
as  a  peripatetic  university  in  instructing  the  people  on  the 
evil  of  commercial  monopoly.     Never  did  they  allow  them- 


THE  CORN  LAWS. 


217 


solves  to  bo  tempted  to  other  politinil  topics.  The  Lcaj^iio 
dill  not  even  wish  to  interfere  witli  (he  svHtem  of  taxation 
further  tlian  extinguisliinif  at  once  mid  forever  tlio  principle 
of  inaintiiininjL,'  taxes  for  \\w  henelit  of  a  partieiilar  elaas.  "If 
it  bo  asked,"  said  Mr.  Cobden,  '"why  it  is  that  we,  profess- 
ing to  bo  free-traders  in  (sverything,  should  restrict  the 
title  of  oiu"  association  to  that  of  the  'National  Anti-Corn 
Law  League,'  I  will  explain  the  riJason.  Wi;  advocate  the 
abolition  of  the  corn  law  because  we  believe  that  to  \n\  tlic 
foster-parent  of  all  other  monopolies;  and  if  wo  destroy  that, 
—  the  j)arent,  the  monster  monopoly, — it  will  save  us  the 
trouble  of  destroying  all  the  rest." 


PART  IV.  — CHAP.  1. 

The  day  arrived  when  the  government  of  the  country  had 
to  bo  conlided  to  the  great  Conservative  i)arty  in  the  House. 
For  some  time  past  the  administration  of  Lord  Mellxturne 
had  shown  unmistakable  signs  of  inherent  weakness,  and  its 
opponents,  counting  among  them  such  men  as  Sir  Robert 
Peel,  Lord  Stanley,  Mr.  Gladstone,  and  Mr.  Disraeli,  were 
decidedly  gaining  strength  and  influence.  The  Conservative 
party  has  been  charged  with  thwarting  and  opposing  the 
liberal  tendencies  of  the  nation,  and  they  certainly  resisted 
the  passing  of  the  Reform  Bill,  the  repeal  of  the  Test  and 
Corporation  Acts,  and  the  Emanci|)ation  of  Roman  Catho- 
lics. Yet  a  memorable  Conservative  administration  is  be- 
fore us,  which  inaugurated  an  era  of  great  [jrosperity,  and 
one  which,  under  the  presiding  genius  of  Sir  Robert  Peel, 
has  ever  since  been  held  in  grateful  remembrance  for  the  prac- 
tical wisdom  which  it  displayed,  and  the  bold  and  vigorous 
commercial  and  financial  policy  it  carried  into  cfTect.  Sir 
Robert  Peel  had  already  gained  for  himself  a  high  reputation 
as  a  statesman.^     As  a  member  of  the  Bullion  Committee 


llri 


.H! 


>  Sir  Robert  Peel's  first  mlministration  was  a  short  one.  IIo  formed  his 
Cabinet  on  December  9,  1834,  and  forthwith  dissolved  Parliament.  A  new 
Parliament  was  summoned  to  meet  on  February  19,  1835,  but  an  amendment  to 
the  address  was  carried  in  the  House  of  Commons  on  February  20,  by  a  ma- 


m 


:  1 4'' ! 


I 


it 


218 


ECONOMIC  HISTORY. 


of  1810,  as  undcr-sccrctary  for  the  colonies  during  the  most 
trying  years  of  <hc  Continental  War,  as  Secretary  for  Ireland, 
in  all  these  ea[)acities  he  proved  himself  an  able  minister 
and  an  economist  of  much  practical  wisdom ;  and  it  was  a 
good  omen  for  the  country  when,  in  Se{)tcmb(M',  1841,  at  a 
time  of  nuich  financial  anxiety,  Sir  Robert  Peel  was  once 
more  called  to  take  the  helm  of  the  State. 

There  was  something  novel  and  encouraging  in  the  speech 
from  the  throne  which  opened  the  labors  of  the  new  admin- 
istration. "Her  Majesty  is  anxious  that  this  ol)ject,  namely, 
the  increase  of  the  public  revenue,  should  be  effected  in  the 
manner  least  burd'  usomc  to  her  people;  and  it  has  appeared 
to  Iler  Majesty,  after  full  deliberation,  that  you  may,  at  this 
juncture,  j)roperly  direct  your  attention  to  the  revision  of 
dutii's  affecting  the  (aoductions  of  foreign  countries.  It  will 
be  for  you  to  consider  whether  some  of  (he  duties  are  not  so 
crifiing  in  amount  as  to  be  unproductive  to  the  revenue,  while 
they  are  vexatious  to  commerce.  You  may  further  examine 
whether  the  principle  of  prohibition  in  which  others  of  these 
duties  are  founded,  be  not  carried  to  an  extent  injurious  alike 
to  the  income  of  the  State  and  the  interest  of  the  people.  Iler 
Majesty  is  desirous  that  you  should  consider  the  laws  which 
regulate  the  trade  in  corn.  It  will  be  for  you  to  determine 
whether  those  laws  do  not  aggravate  the  natural  fluctuation 
of  su[)ply,  whether  they  do  not  embarrass  trade,  derange  cur- 
rency, and  by  their  oi)eration  diminish  the  comfort  and  in- 
crease the  privations  of  the  great  body  of  the  community." 
Surely  this  was  a  programme  more  liberal  than  could  have 
l)een  exjiected  from  a  C(mservative  ministry;  but  the  temper 
of  the  people  and  the  exigencies  of  the  time  demanded  that 
and  a  great  deal  more.  (Jloom  and  discontent  prevailed  ex- 
tensively throughout  the  manufacturing  districts.  The  Anti- 
Corn-Law  League  had  by  this  time  become  formidal)le.  The 
demand  was  loud  and  imperious  for  cheap  food,  and  the  total 
repeal  of  the  corn  laws.     And  on  the  day  fixed  for  the  an- 

jority  of  300  to  802.  Otlier  adverse  divisions  immediately  thereafter  took 
place,  and  Sir  Hubert  Peel  announced  his  resignation  of  the  ministry  on 
April  8. 


Hi 


THE  CORN  LAWS. 


219 


noiiiicemont  of  the  ministerial  measure  some  five  hundred 
deputii's  from  the  Anti-Corn-Law  Associations  in  the  me- 
tropolis and  provinces  went  in  procession  to  the  House  of 
ConiniDus,  but  were  refused  admittance.  Yet  with  all  this 
the  guvernnient  was  not  disconcerted,  and  with  imperturba- 
ble gravity  on  February  9,  1842,  ;?ir  Robert  Peel  exposed 
the  policy  of  the  cabinet  on  the  corn  laws. 

At  first  Sir  Roliert  Peel  did  not  attach  much  weight  to  the 
influence  of  these  laws.  In  his  speech  in  the  House  he  said 
that  to  his  mind  the  (question  was  not  so  much  what  was  the 
price  of  food  as  what  was  the  command  which  the  laboring 
classes  of  the  population  had  of  all  that  constituted  the  en- 
joyments of  life.  His  belief  and  the  belief  of  his  colleagues 
was  that  it  was  important  fi^"  he  country  to  take  care  that 
the  main  source  of  the  supply  of  corn  should  be  derived  from 
domestic  agriculture.  And  ho  contended  that  a  certain 
amount  of  protection  was  absolutely  required  for  that  indus- 
try. But  he  made  a  most  important  avowal,  one  which  no 
Protectionist  ministry  had  ever  made,  that  protection  should 
not  be  retained  for  the  special  bcnelit  of  any  particular  class, 
but  only  for  the  advantage  of  the  nation  at  large,  and  in  so 
far  only  as  was  consistent  with  the  general  welfare  of  all 
classes  of  society.  Sir  Robert  Pool  then  entered  on  the  ex- 
tent of  such  protection,  and  having  taken  54.s'.  to  o8.s.  per 
quarter  as  the  price  at  which  corn  should  range  for  a  fair 
remuneration  to  the  agriculturist,  he  asked.  Shall  the  corn 
laws  be  based  on  a  sliding  scale,  or  on  a  fixed  duty  ?  Much 
might  be  said  for  the  one  and  for  the  other.  A  sliding  scale 
was  introduced  in  France  iu  1819,  one  had  boon  adopted 
in  Belgium,  the  Xotherlands,  and  other  countries,  and  it 
seemed  to  have  the  advantage  of  adapting  itself  to  every 
circumstance.  But  experience  did  not  confirm  the  hopes 
entertained  of  its  working.  It  did  not  hinder  prices  rising 
higher  than  was  desiral)lo  in  years  of  scarcity;  and  it  had  the 
same  j)reiudicial  effect  as  every  corn  law  of  (pausing  the  cul- 
tivation of  land  to  be  regulated,  not  by  its  inherent  capacity, 
but  by  the  amount  of  forced  stimulus  given  to  it  by  the 
Legislature.     Besides   these  radical  defects   the  objections 


if 


;Hi 


220 


ECONOMIC  HISTORY. 


i 


urged  against  the  sliding  scale  were,  that  the  reduction  of 
duty  was  so  rapid  as  to  hold  out  temptation  to  fraud ;  that 
it  operated  as  an  inducement  to  retain  corn,  or  combine  for 
the  purpose  of  influencing  the  averages ;  that  the  rapid  de- 
cline of  the  duty  was  injurious  to  the  consumer,  the  pro- 
ducer, the  revenue,  and  the  commerce  of  the  country ;  that 
it  was  injurious  to  the  consumer  because  when  corn  was  at  a 
high  price,  say  between  ijiju.  and  70s.  and  just  when  it  would 
be  for  the  public  advantage  that  corn  should  be  liberated  for 
the  purpose  of  consumi)tion,  the  joint  operation  ^.f  increased 
price  and  diminished  duty  induced  the  holders  to  keep  it 
back  in  the  hope  of  realizing  the  price  of  uj)wards  of  70s. 
and  so  paying  only  Is.  duty;  that  it  operated  injuriously  to 
the  agricultural  interest,  because  it  held  out  a  temptation  to 
keep  back  corn  until  it  could  be  suddenly  entered  for  con- 
sumption at  the  lowest  amount  of  duty,  when  agriculture 
lost  the  protection  which  the  law  intended  it  should  possess ; 
that  it  was  injurious  to  the  revenue  because  instead  of  corn 
being  entered  for  home  consumption  when  it  arrived,  it  was 
retained  until  it  could  be  introduced  at  Is.  the  revenue  los- 
ing the  dift'erence  between  Is.  and  the  amount  of  duty  which 
would  otherwise  have  been  levied;  that  it  was  injurious  to 
connnerce  because  when  corn  was  grown  at  a  distance,  in 
America,  for  instance,  the  grower  was  subject  to  the  disad- 
vantage that  before  his  cargo  arrived  in  this  country  the 
sudden  entries  of  wheat  at  Is.  duty  from  countries  nearer 
England  might  have  so  diminished  the  price  and  increased 
the  duty  as  to  cause  his  speculation  to  prove  not  only  a  fail- 
ure but  ruinous.  These  were  formidable  objections  to  any 
sliding  scale,  but  between  a  gradual  and  a  fixed  rate  of  duty 
there  was  not  a  material  difference.  On  the  other  hand,  a 
fixed  duty  of  8s.  per  quarter  was  too  low  as  a  protection  in 
time  of  abundance,  and  was  in  effect  a  prohibitory  duty  in 
time  of  scarcity.  Nor  was  it  possible  to  maintain  more  than 
a  nominal  duty  when  prices  began  to  rise.  It  was  indeed 
difficult  to  strike  the  balance  of  advantage  and  inconvenience 
between  the  sliding  scale  and  the  fixed  duty.  So,  on  the 
whole,  Sir  Robert  Peel  favored  the  principle  of  the  sliding 


THE  CORN  LAWi. 


221 


scale,  that  is,  of  making  the  duty  upc  n  corn  vary  inversely 
with  the  price  in  the  home  market,  ta'ang  the  average  of  the 
market  prices  from  returns  colleocod  by  excise  officers. 
Having,  therefore,  decided  on  changing  208.  duty  when  the 
average  price  of  wiict  was  ^'^o.  and  Sis.  ])er  quarter,  ho 
proposed  to  make  that  duty  fall  by  a  reduction  of  Is.  a 
quarter  as  the  average  price  rose  Is.,  with  some  slight  modi- 
fications, so  that  the  duty  should  be  only  Is.  per  quarter 
when  the  price  of  wheat  rose  to  73s.  a  quarter  and  upwards, 
and  a  bill  so  framed  he  presented  to  the  House  of  Commons. 
The  House  was  not  prepared  at  the  time  for  a  very  liberal 
measure.  Lord  John  Russell  made  a  motion  in  favor  of  a 
fixed  duty,  but  it  was  not  popular;  and  notwithstanding  a 
few  expressions  of  dissatisfaction,  the  Government  proposal 
was  well  received.  Lord  John  Russell's  amendment  was 
lost  by  226  to  349,  and  Sir  Robert  Peel's  bill  passed  into 
law.  1  But  the  country  was  not  satisfied.  ]\Ieetings  con- 
tinued to  bo  held  in  the  manufacturing  districts,  and  Mr. 
Villiers,  stimulated  by  the  representations  and  efforts  of  the 
Anti-Corn-Law  League,  again  brought  forward  his  motion 
for  the  total  repeal  of  the  corn  laws,  which  was  again  lost 
by  the  enormous  majority  of  90  to  393.  The  battle  of  the 
corn  laws  had  \)\  this  time  become  violent  both  in  and  out  of 
Parliament,  and  ^Ir.  Villiers  was  not  likely  to  be  dispirited 
by  the  result  of  this  divisicm. 

It  is  not,  however,  by  the  vain  attempt  to  render  a  corn 
law  acce))tablo  tliat  the  commercial  administration  of  Sir 
Robert  Peel  will  l)e  rememl»ered.  That  was  at  best  a  tem- 
porary and  transitory  measure.  It  is  when  we  consider  his 
financial  policy  as  a  whole,  and  more  especially  ilie  plan 
which  he  devised  for  improving  the  state  of  the  finances 
and  imparting  new  life  to  commerce  and  industry,  that  wo 
recognize  the  breadth  of  view,  the  sound  wisdom,  and  [)racti- 
cal  knowledge  which  Sir  Robert  Peel  jiossessed.  For  years 
past  the  finances  of  the  country  had  fallen  into  complete  dis- 
order.    An  annual  deficiencv  of  one  or  two  millions  had 


I'  -• 

-V 


«)■ 


»  5  &  6  Vict.  c.  14.    [Table  omitted.] 


nt 


mmmm 


f-:'    ii 
t 


.'"i  : 


n  J  ■    it: 


II/ 


i 


;? 


ii 


h' 

1 

1  !■ 

■^ 

i' 

■1 

■  1 

{'  < 

a 

[r 

222 


ECONOMIC  HISTORY. 


become  a  chronic  evil,  and  no  means  of  escape  presented 
itself.'  With  a  disaffected  people  and  frequent  riots  in  the 
manufacturing  districts,  with  a  paralyzed  trade  and  wages 
reduced  to  a  very  low  scale,  any  idea  of  imposing  new  taxes 
or  making  those  existing  heavier  was  out  of  the  question. 
A  temporary  and  casual  deliciency  might  have  been  met  by 
an  issue  of  exchequer  bills ;  but  what  would  have  been  the 
use  of  resorting  to  such  expedient  when  there  was  no 
ground  whatever  for  expecting  any  immediate  improvement? 
On  the  other  hand,  to  have  recourse  to  loans  in  times  of 
peace  in  order  to  balance  the  revenue  and  exfienditure  was 
equally  inadmissible.  Sir  Robert  Peel  knew  that  a  timely 
and  moderate  reduction  of  taxes  is  favorable  rather  than 
injurious  to  the  revenue.  He  knew  that  though  for  the 
moment  such  a  reduction  might  show  a  loss,  nevertheless, 
by  the  stimulus  it  affords  to  increasing  consumption,  the 
revenue  would  soon  recover  itself,  and  probably  exceed  the 
amount  previously  produced.  Yet,  unfortunately,  the  few 
precedents  he  had  for  such  an  operation,  attempted  in  times 
not  very  prosperous,  were  not  encouraging.  In  182")  the 
revenue  from  wine  amounted  to  £2,153,000.  The  duty  was 
then  reduced  from  Os.  lid.  to  4s.  2; (7.  i)er  gallon;  and  what 
was  the  result  ?  The  year  after  tht;  revenue  was  ,£1,400,000; 
it  afterwards  increased  to  £1,700,000,  but  it  fell  again  to 
£1,400,000.  The  duty  on  tobacco  had  been  reduced  from 
4s.  to  3.S'.  per  pound.  B(;fore  the  reduction  the  revenue  was 
£3,878,000,  immediately  after  it  fell  to  £2,000,000:  and 
though  it  rose  somewhat  from  that  point,  it  did  not  reach 
the  ])reviou3  amount.  Of  course  the  consumption  of  articles 
of  luxury,  such  as  wine  i'ud  t<jbacco,  is  not  so  affected  by  a 
reduction  of  duty  as  that  of  tea,  sugar,  and  other  necessaries 
of  life.  ^Moreover,  the  resources  of  the  country  were  at  that 
time  comparatively  undeveloped,  to  admit  of  any  large  in- 
crease of  consumption.  Still,  such  experience  did  not  war- 
rant the  exjuM'tation  that  a  reduction  of  taxes  would  have 
the  effect  of  tilling  the  exchequer. 

'  The  (Icficionry  in  the  yoar  riKh'd  April  6,  1811,  was  .£1,157,601;  in  the 
year  ended  April  f),  1812,  Xl  17,027 ;  and  1813,  £2,704,510. 


THE   CORN  LAWS. 


223 


But  the  circumstances  of  trade  required  insto^t  relief, 
and  the  tariff  needed  a  thorough  reform  and  simplification. 
Two  years  before,  in  1840,  on  the  motion  of  Mr.  Hume,  a 
committee  of  the  House  of  Commons  was  appointed  to  in- 
quire into  the  duties  levied  on  imports,  and  to  determine 
how  far  they  were  imposed  for  purposes  of  revenue ;  and  in 
their  report  the  committee  said:  "The  tariff  of  the  United 
Kingdom  presents  neither  congruity  nor  unity  of  purpose ; 
no  general  principles  seem  to  have  been  applied.  The  tariff 
often  aims  at  incompatible  ends;  the  duties  are  sometimes 
meant  to  be  both  productive  of  revenue  and  for  protection, 
objects  which  are  fi'cquently  inconsistent  with  each  other. 
Hence  they  sometimes  operate  to  the  complete  exclusion  of 
foreign  produce,  and  in  so  far  no  revenue  can  of  course  be 
received ;  and  sometimes  when  the  duty  is  inordinately  high 
the  amount  of  revenue  is  in  consequence  trifling.  They  do 
not  make  the  receipt  of  revenue  the  main  consideration,  but 
allow  that  primary  object  of  fiscal  regulations  to  be  thwarted 
by  the  attempt  to  protect  a  great  variety  of  particular  inter- 
ests at  the  expense  of  revenue,  and  of  the  commercial  in- 
tercourse with  other  countries.  While  the  tariff  has  been 
made  subordinate  to  many  small  i)roducing  interests  at  home 
by  the  sacrifice  of  revenue  in  order  to  support  their  interest, 
the  same  principle  of  interference  is  largely  applied  by  the 
various  discriminating  duties  to  the  produce  of  our  colonies, 
by  whicli  exclusive  advantages  are  given  to  the  colonial  in- 
terests at  the  expense  of  the  mother  country."  Such  were 
the  general  features  of  the  tariff,  the  result  of  years  of  care- 
less legislation  on  the  subject.  The  fact  was  indeed  too 
evident  that  it  was  necessary  to  prune  the  over-burdened 
tariff,  and  to  liberate  a  large  variety  of  articles  from  the 
needless  trammels  of  legislation. 

But  how  to  accomplish  this  without  a  handsome  surplus 
revenue  ?  Fortunately  Sir  Robert  Peel,  undeterred  by  the 
state  of  the  revenue,  determined  to  do  what  was  neces- 
sary for  trade.  And  he  acted  wisely.  Untrammel  indus- 
try from  the  boiuls  of  legal  restrictions,  open  the  avenue 
to  wealth  and  prosperity, —  that  is  the  right  policy.     Pur- 


I 


Hr 


.••ij 


i  '3 


1- 

1   ■»    '  "»■ 

mi' 

I.    M^ 


f 


m 


m 


'r 

-1 

:  i 
i 

224 


ECONOMIC  HIS  TOR  V. 


sue  this  course  and  there  is  no  fear  but  the  revenue  will 
set  itself  speedily  right.  Some  slight  reductions  he  made 
in  1841,  but  on  March  11,  1842,  in  his  famous  financial 
statement,  he  ])roposed  to  reduce  considerably  all  the 
duties  on  the  raw  materials  of  manufacture,  all  duties 
on  goods  partially  or  wholly  manufactured,  as  well  as 
the  duties  on  timber,  and  all  export  duties,  together 
producing  ^£1, 500,000;  and  to  make  np  this  loss,  and  to 
provide  for  the  original  deficit  in  the  revenue,  amount- 
nig  to  .£2,570,000,  by  an  income  and  projierty  tax  of 
7a.  in  the  pound,  which  he  expected  would  produce 
£3, 700, 000  ;i  by  the  equalization  of  the  stamp  and  spirit 
duties,  which  would  give  .£400,000;  and  by  a  small  tax  on 
the  exportati(m  of  coals,  which  would  give  £200,000, —  mak- 
ingr  in  all  £4,310,000.  It  was  a  very  simple  plan;  yet 
lucre  \''is  profound  wisdom  in  Sir  Robert  Peel's  Itudgct. 
Th(t  Vo  :!.;•  of  the  reductions  proposed  far  exceeded  the 
amount  of  nlief  in  taxation  they  each  and  collectively 
aff.  ;(]od.  The  removal  of  the  taxes  on  raw  materials  was  a 
grcut  buoi\,  inasii.at'  as  they  had  the  effect  of  putting  our 
manufactures  in  n  disadvantageous  position  in  the  markets 
of  the  world,  and  restricting  the  field  for  the  employment  of 
capital  and  labor.  As  was  said  in  the  discussion  on  the 
budget,  suppose  50,000  head  of  cattle  were  to  be  annually 
imported  in  consequence  of  such  remissions,  such  importa- 
tion would  produce  but  a  small  effect  on  the  price  of  meat, 
but  it  would  create  an  import  trade  to  the  amount  of  half  a 
million  of  money,  a  trade  which,  in  its  nature,  would  tend 
to  produce  an  export  trade  in  return  of  an  c(|ual  amoimt. 
Our  export  trade  is  measured  and  limited  by  our  import 
trade.  If  an  individual  merchant  cannot  afford  to  send  his 
goods  to  other  countries  without  obtaining  any  return, 
neither  can  all  merchants  collectively,  and  the  country  as  a 
whole  afford  to  export  commodities  to  foreign  countries,  if 

•  The  nmoimt  of  duty  assessed,  in  1843,  was  £5,608,348.  The  amount  of 
property  assessed  was:  Schedule  A,  X9o,284,497 ;  Schedule  B,  £46,709,915; 
Schedule  C,  £27,009,793;  Schedule  D,  £71,330,31i;  Schedule  E,  £9,718,454. 
Total,  £261,013,003.    [Additional  note  omitted.] 


THE  CORN  LAWS. 


225 


I 


Sr 


ill  some  shape  or  other  imports  arc  not  received  from  those 
countries  in  return.  Reduce  the  duties  on  imports,  and  you 
tliereby  promote  the  export  of  our  produce  and  manufactures. 
Remove  those  taxes  which  burden  our  manufactures  and  you 
j)romotc  the  importation  of  those  articles  which  are  neces- 
sary to  tlie  comfort  and  welfare  of  the  nation.  The  income 
tax  might  be  odious,  "inquisitorial,  intolerable,"  yet  it  was 
at  that  time  the  only  means  by  which  the  necessary  reforms 
in  the  tariff  could  be  attempted.  And  the  nation,  having 
balanced  the  evil  and  the  good  of  the  proposal,  and  having 
found  that  the  advantages  preponderated,  cheerfully  accepted 
the  government  proposal,  and  gave  to  the  proposal  its  hearty 
consent. 

The  commercial  policy  thus  inaugurated  by  Sir  Robert 
Peel,  being  in  perfect  accord  with  sound  economic  princi- 
ples, could  not  fail  to  be  successful.  From  1841  to  1843,  as 
wc  have  seen,  there  was  a  yearly  deficit  in  the  budget.  In 
the  year  ending  April  5,  1844,  Sir  Robert  Peel  found  him- 
self in  possession  of  a  handsome  surplus  of  .£2,(300,000, 
which  was  exceeded  in  the  following  year,  and  continued  at 
a  high  point  for  four  consecutive  years.^  The  exjjorts  of 
British  produce,  which  in  1842  had  fallen  to  ^47,000,000 
increased  to  £52,000,000  in  1843;  to  £58,000,000  in  1844; 
and  .£60,000,000  in  1845.  The  ship])ing  entered  and  cleared 
increased  from  0,000,000  tons  in  1842  to  12,000,000  tons  in 
1845.  In  every  way,  financially  and  commercially,  the  re- 
sults fully  realized  the  anticipations  formed,  and  Sir  Robert 
was  encouraged  to  advance  still  further  in  the  same  direc- 
tion. Nothing  important  was  attempted  in  the  budget  of 
1843, '-^  but  in  1844  the  duty  on  wool  was  abolished,  the 
duties  on  currants  and  coffee  were  reduced,  and  a  great 
change  was  made  on  the  duties  on  marine  insurance.  And 
then,  as  we  have  scon  in  the  previous  cha))ter,  the  differential 
duties  against  foreign-grown  sugar  were  relaxed  by  permit- 
ling  the  importation  of  sugar,  the  growth  of  China,  Java,  or 

1  The  surplus  in  the  year  ended   April  5,  1844,   was  £2,685,125;    1845, 
£3,027,615;   1840,  £1,647,324;  and  in  1847,  £2,823,762. 
*  [Foot-note  on  "  Taxes  Reduced  or  Repealed,"  omitted.] 

16 


\m 


■Am 


wmmm 


226 


ECONOMIC  HISTORY. 


Manilla,  or  of  any  other  countries  which  Her  Majesty  in 
council  shall  have  declared  to  be  admissible  nt  moderate 
rates.  In  1845  another  still  more  important  scries  of  re- 
forms was  introduced.  The  duty  on  cotton  wool,  which, 
however  slight  and  inappreciable  on  the  coarser  material, 
pressed  rather  heavily  on  the  liner  muslin,  was  abolished. 
The  export  duty  on  coals,  which  had  been  found  vexatious 
and  injurious  was  removed.  The  timber  duties  were  further 
reduced.  The  duty  on  glass  was  removed  from  the  tariff, 
and  also  the  duties  on  four  hundred  and  thirty  articles, 
which  produced  little  or  no  revenue,  including  fibrous  mate- 
rials such  as  silk,  hemp,  and  flax,  furniture,  woods,  cabinet- 
makers' materials,  animal  and  vegetable  oil,  ores  and 
minerals,  etc.  In  184G  the  liberal  policy  was  further  ex- 
tended. Hitherto  our  manufacturers  had  been  benefited 
by  the  free  access  granted  to  the  raw  materials.  It 
was  right  to  ask  of  them  to  relinqiiish  some,  at  least,  of 
the  protecting  duties  still  in  existence.  And  the  duties 
on  linen,  woollen,  and  cotton  manufactures  were  reduced 
from  20  to  10  per  cent.  The  silk  duties  then  at  30  per 
cent  were  also  reduced  to  15  per  cent.  A  reduction  was 
made  on  the  duties  on  stained  paper,  on  manufactures  of 
metals,  earthenware,  on  carriages,  and  on  manufactures 
of  leather ;  and  the  duties  on  butter,  cheese,  and  hops  were 
further  reduced.  ^ 

But  was  it  right  to  effect  all  these  reforms  without  asking 
for  reciprocity  on  the  part  of  foreign  countries  ?  For  years 
past  it  was  known  that  Her  Majesty's  government  had  used 
every  effort  to  enter  into  treaties  with  several  States,  such 
as  Brazil,  Portugal,  SiKiin,  and  France,  with  a  view  to 
the  adoption  of  mutual  concessions.  In  1843  and  1844 
Mr.  Ricardo  brought  the  subject  before  the  House  of  Com- 
mons, and  moved  for  an  address  to  Her  Majesty,  praying 
that  Her  Majesty  be  pleased  to  give  directions  to  her  ser- 
vants not  to  enter  into  any  negotiations  with  foreign  powers 

1  In  1842  there  were  1,090  articles  and  subdivisions  of  articles  charged  with 
distinct  rates  of  import  duty  in  the  customs  tariff.  In  1846  the  number  was 
reduced  to  424. 


\m  :  f 


THE  CORN  LAWS. 


227 


1  Hansard's  Debates,  Jan.  27, 184G. 


* 


which  wouhl  make  any  contemplated  alterations  of  the  tarilT 
of  the  United  Kingdom  contingent  on  the  alterations  of  the 
tariff  of  other  countries;  and  exjjressing  to  Iler  Majesty  the 
opinion  of  the  House,  that  the  great  object  of  relieving 
the  commercial  intercourse  between  this  country  and  foreign 
nations  from  all  injurious  restrictions  would  be  best  promoteil 
by  regulating  our  own  customs  duties,  as  might  bo  most 
suitable  to  the  financial  and  commercial  interests  of  this 
country,  without  reference  to  the  aniount  of  duties  which 
foreign  powers  might  think  it  expedient  for  their  own  in- 
terest to  levy  on  British  goods.  But  the  government  opposed 
the  motion,  and  Mr.  Ricardo  was  defeated.  Mr.  Gladstone 
especially  defended  the  policy  of  endeavoring  to  obtain  such 
treaties.  He  did  not  wish,  he  said,  "to  be  trammelled  by 
an  abstract  proposition,  and  unless  Mr.  Ricardo  could  show 
that  there  were  no  possible  circumstances  in  which  a  com- 
mercial treaty  could  be  aught  other  than  evil,  he  had  no 
right  to  call  upon  the  House  to  aflirm  his  resolution."  The 
government,  however,  now  practically  acted  on  the  policy 
advocated  by  Mr.  Ricardo,  and  Sir  Robert  Peel  avowed  it 
frankly. 

"I  have  no  guarantee,"  he  said,'  "to  give  you  that  other 
countries  will  immediately  follow  our  examj)le.  I  give  you 
that  advantage  in  the  argument.  Wearied  with  our  long 
and  unavailing  efforts  to  enter  into  satisfactory  commercial 
treaties  with  other  nations,  wo  have  resolved  at  length  to  con- 
sult otir  interests,  and  not  to  punish  other  countries  for  the 
wrong  they  do  us  in  continuing  their  high  duties  upon  the 
importation  of  our  products  and  manufaeturoa,  by  continu- 
ing high  duties  ourselves,  encouraging  unlawful  trade.  We 
have  had  no  communication  with  any  foreign  government 
npon  the  subject  of  these  reductions.  We  cannot  promise 
that  France  will  immediately  make  a  corresponding  reduction 
in  her  tariff.  I  cannot  promise  that  Russia  will  prove  her 
gratitude  to  us  for  our  reduction  of  duty  on  her  tallow  by 
any  diminution  of  her  duties.      You  may,  therefore,  say  in 


".I' 


t 

ii 


ih^l 


V  1 


:  ft 


rJ  i.flac 


m. 


ik 


I 


*;  *   ; 


228 


ECONOMIC  HISTORY. 


opposition  to  the  present  plan,  'What  is  this  8U])crfhious 
lllK'rality,  that  you  are  going  to  do  away  with  all  those 
duties,  and  yet  you  exi)eet  nothing  in  return  ? '  I  may  per- 
haps be  told  that  many  foreign  eountrics  since  the  former 
relaxation  of  duties  on  our  part,  — and  that  would  be  ])er- 
fcctly  consistent  with  the  fact, — foreign  countries  which 
have  been  benefited  by  our  relaxations,  have  not  followed  our 
example ;  nay,  have  not  only  not  followed  our  example,  but 
have  actually  applied  to  the  importation  of  British  goods 
higher  rates  of  duties  than  formerly.  I  quite  admit  it.  I 
give  you  all  the  benefit  of  that  argument.  I  rely  upon  that 
fact  as  conclusive  proof  of  the  policy  of  the  course  we  are 
pursuing.  It  is  a  fact  that  other  countries  have  not  followed 
our  cxanii)lc,  and  have  levied  higher  duties  in  some  cases  upon 
our  goods.  But  what  has  been  the  result  upon  the  amount 
of  your  exports  ?  You  have  defied  the  regulations  of  these 
countries.  Your  export  trade  is  greatly  increased.  Now, 
why  is  that  so  ?  Partly  because  of  your  acting  without  wish- 
ing to  avail  yourselves  of  their  assistance,  partly  because  of 
the  smuggler,  not  engaged  by  you,  in  so  many  continental 
countries,  whom  the  strict  regulations  and  the  triple  duties 
which  are  to  prevent  the  ingress  of  foreign  goods  have  raised 
up,  and  partly  perhaps  because  these  very  precautions  against 
the  ingress  of  your  commodities  are  a  burden,  and  the  taxa- 
tion increasing  the  cost  of  production  disqualify  the  foreigner 
from  competing  with  you.  But  your  exports,  whatever  be 
the  tariff  of  other  countries,  or  however  apparent  the  ingrati- 
tude with  which  they  have  treated  you,  your  export  trade 
has  been  constantly  increasing.  By  the  remission  of  your 
duties  upon  the  raw  material,  by  inciting  your  skill  and  in- 
dustry, by  competition  with  foreign  goods  you  have  defied 
your  competitors  in  foreign  markets,  and  you  have  been 
enabled  to  exclude  them.  Notwithstanding  their  hostile 
tariffs  the  declared  value  of  British  exports  has  increased 
above  ^10,000,000  during  the  period  which  has  elapsed  since 
the  relaxation  of  duties  on  your  part.  I  say,  therefore,  to 
you  that  these  hostile  tariffs,  so  far  from  being  an  objection 
to  continuing  your  policy,  are  an  argument  in  its  favor.     But, 


THE   CORN  LAWS. 


229 


depend  upon  it,  your  example  will  ultimately  prevail.  When 
your  example  could  be  quoted  in  favor  of  restriction,  it  was 
(pioted  largely.  When  your  example  can  l>e  quoted  in  favor 
of  relaxation  as  conducive  to  your  interest,  it  may,  perhaps, 
excite  at  first  in  foreign  governments,  in  foreign  boards  of 
trade  but  little  interest  or  feeling;  but  the  sense  of  the  peo- 
ple of  the  great  body  of  consumers  will  prevail,  and  in  spite 
of  the  desire  of  government  and  boards  of  trade  to  raise 
revenue  by  restrictive  duties,  reason  and  common  sense  will 
induce  rclaxatioii  of  high  duties.     That  is  my  lirm  belief." 


PART  IV.  — CHAP.  4. 

The  Anti-Corn-Law  agitation  was  one  of  those  movements 
which,  being  founded  on  right  principles,  and  in  harmony 
with  the  interest  of  the  masses,  was  sure  to  gather  fresh 
strength  by  any  event  affecting  the  supply  of  food.  It  was 
popular  to  attempt  to  reverse  a  policy  which  aimed  almost 
exclusively  to  benefit  one  class  of  society.  It  was  well 
known  that  the  League  wanted  to  outset  an  economic  fallacy, 
and  that  they  wished  to  relieve  the  people  from  a  great  bur- 
den. And  as  time  elapsed  and  the  soundness  of  the  princi- 
ples propounded  by  the  League  at  their  public  meetings  was 
more  and  more  appreciated,  their  triumph  became  certain, 
and  Her  Majesty's  government  itself  began  to  see  that  it  was 
no  longer  ])ossible  to  treat  the  agitation  either  by  a  silent 
passiveness  or  by  expressed  contempt.  The  economic  theo- 
rists had  the  mass  of  the  people  with  them.  Their  gather- 
ings were  becoming  more  and  more  enthusiastic.  And  even 
amidst  Conservative  landowners  there  were  not  a  few  enlight- 
ened and  liberal  minds  who  had  already,  silently  at  least, 
espoused  the  new  ideas.  No  change  certainly  could  be  ex- 
pected so  long  as  bread  was  cheap  and  labor  abundant.  But 
when  a  deficient  harvest  and  a  blight  in  the  potato-crop  crip- 
pled the  resources  of  the  people  and  raised  grain  to  famine 
prices,  the  voice  of  the  Lc3,gue  acquired  greater  power  and 
influence.  Hitherto  they  had  received  hundreds  of  pounds. 
Now  thousands  were  sent  in  to  support  the  agitation.     A 


:  M 


\Mi 


(?■< 


ii 


280 


ECONOMIC  IIlSTOnV. 


(pmrtcr  of  a  million  was  readily  contrilmtcd.  Nor  were  the 
coutrilmtors  LancuHhin^  mill-owners  cxiiluriividy.  Among 
them  were  mereliants  and  hankers,  men  of  heart  and  men  of 
mind,  the  poor  laijorer  and  the  peer  of  the  realm.  The  fer- 
vid oratory  of  Hright,  the  demonstrative  anil  at''!;nmentativo 
reasoning  of  Col)den,  the  more  popular  appeals  of  Fox, 
Rawlins,  and  other  platform  speakers,  filled  the  newsp^'oor 
press  and  were  eagerly  read.  And  when  Parliament 
solved  in  August,  lH-4.5,  even  Sir  llohert  Peel  showed  somo 
slight  symptoms  of  a  convietion  that  the  days  of  the  corn 
laws  were  numbered.  Every  day  in  truth  brought  homo  to 
his  mind  a  stronger  need  for  action,  and  as  the  ravages  of 
the  potato  disease  progressed  he  saw  that  all  further  resist- 
ance would  be  absolutely  dangerous. 

A  cabinet  council  was  held  on  October  31  of  that  year  to 
consult  as  to  what  was  to  be  done,  and  at  an  adjourned  meet- 
ing on  November  o  Sir  Robert  Peel  intimated  his  intention 
to  issue  an  order  in  council  remitting  the  duty  on  grain  in 
bond  to  one  shilling,  and  oj)cning  the  ports  for  the  admission 
of  all  species  of  grain  at  a  smaller  rate  of  duty  until  a  day  to 
be  named  in  the  order;  to  call  Parliament  together  on  '^o 
27th  inst.,  in  order  to  ask  for  an  indemnity  and  a  sanct  ' 
the  order  by  law;  and  to  submit  to  Parliament,  immcdju,.  ^ 
after  the  recess,  a  modification  of  the  existing  law,  includ- 
ing the  admission,  at  a  no.ninal  duty,  of  Indian  corn  and  of 
British  colonial  corn.  A  serious  diiferencc  of  opinion,  how- 
ever, was  found  to  exist  in  the  cabinet  on  the  question 
brought  before  them, —  the  only  ministers  supporting  such 
measures  being  the  Earl  of  Aberdeen,  Sir  James  Graham, 
and  Mr.  Sidney  Herbert.  Nor  was  it  easy  to  induce  the 
other  members  to  listen  to  reason.  And  though,  at  a  snbse- 
(jucnt  meeting  held  on  November  28,  Sir  Robert  Peel  so  far 
secured  a  majority  in  his  favor,  it  was  evident  that  the  cabi- 
net was  too  divided  to  justify  him  in  bringing  forward  his 
measures,  and  he  decided  upon  resigning  office. 

His  resolution  to  that  effect  having  been  communicated  to 
the  Queen,  Her  Majesty  summoned  Lord  John  Russell  to 
form  a  cabinet;  and  to  smooth  his  path,   Sir  Robert  Peel, 


THE  CORN  LAWS. 


231 


witli  churactcriatic  frankncsa,  sent  a  incraorandum  to  Ilor 
MajoHty  I'lubodying  a  promiso  to  ^'ivo  him  his  support.  Hut 
Lord  John  Ruaaoll  failed  in  hia  elTorta,  and  the  Queen  had 
no  alternative  but  to  recall  Sir  Robert  Peel  and  f?ive  him 
full  power  to  carry  out  hia  meaaures.  It  was  under  aueh 
eircumatanccs  that  Parliament  waa  called  for  January  22, 
1840,  and  on  January  27  the  government  plan  was  pro- 
pounded before  a  crowded  House.  It  was  not  an  immediate 
repeal  of  the  corn  laws  that  Sir  Robert  Peel  recommended, 
lie  jiropoaed  a  temporary  protection  for  three  years  till  Feb- 
rurary  1,  1841),  impoaing  a  scale  during  that  time  ranging 
from  48.  when  the  price  of  wheat  should  be  50».  per  quarter 
and  upward,  and  10s.  when  the  price  should  be  under  48«. 
per  quarter,  and  that  after  that  period  all  grain  should  be 
admitted  at  the  uniform  duty  of  Is.  per  quarter.  The  meas- 
ure, as  might  have  been  expected,  was  received  in  a  very 
different  manner  by  the  political  parties  in  both  Houses  of 
Parliament.  There  was  treason  in  the  Conservative  camp, 
it  was  said,  and  keen  and  bitter  was  the  opposition  otl'ered 
to  the  chief  of  the  party.  For  twelve  nights  speaker  after 
speaker  indulged  in  personal  recriminations.  They  recalled 
to  Sir  Robert  Peel's  memory  the  speeches  he  had  made  in 
defence  of  the  corn  laws.  And  as  to  his  assertion  that  he 
had  changed  his  mind,  they  denied  liis  right  to  do  so.  Mr. 
ColqulKJun  "wondered  that  Sir  Robert  could  say,  '  I  have 
changed  my  opinion,  and  thei-o  is  an  end  of  it. '  But  there 
was  not  an  end  of  it.  His  right  honorable  friend  must  not 
forget  the  laws  by  which  the  words  of  men  of  genius,  whether 
orators  or  poets,  are  bound  up  with  them.  His  right  honor- 
able friend's  words  could  not  thus  pass  away.  They  were 
winged  shafts  that  pierced  many  minds.  They  remained 
after  the  occasion  which  produced  them  passed  away.  His 
right  honorable  friend  must  remember  that  the  words  which 
he  had  used  adhered  to  the  memory,  moulded  men's  senti- 
ments, guided  public  opinion.  He  must  recollect  that  the 
armor  of  proof  which  he  had  laid  aside,  and  the  lance  which 
ho  had  wielded,  and  with  which  he  had  pierced  many  an 
encumbered  opponent,  remained  weighty  and  entire.    Greatly 


\k 


% 


.•(1 


232 


ECONOMIC  HISTORY. 


.ie; 


N!     I" 


(lid  he  wish  that  his  right  honorable  friend  were  again  on 
this  side  to  wield  them,  that  he  were  here  to  lead  their  ranks 
and  guide  then)  by  his  prowess.  But  if  not,  they  retained  at 
least  his  arms ;  these  lay  at  their  feet,  strewed  all  around 
them,  an  arsenal  of  power."  Petulant  remonstrances  like 
these  were  of  course  of  little  avail.  Sir  Robert  Peel  and 
Mr.  Cobdcn  were  ready  to  meet  every  challenge,  and  to  re- 
fute every  argument  with  their  unanswerable  logic  of  facts. 
And  when  the  opposition  endeavored  to  throw  all  the  respon- 
sibility of  a  measure  of  such  a  character  on  the  prime  minis- 
ter, Mr.  Cobden  besought  them  to  turn  from  the  will  of  one 
individual  to  those  laws  economic  and  divine  which  seemed 
to  impose  the  duty  of  laying  wide  open  the  door  for  the  im- 
portation of  food.  "Oh,  then  divest  the  future  prime  minis- 
ter of  this  country  of  that  odious  task  of  having  to  reconcile 
rival  interests ;  divest  the  office,  if  ever  you  would  have  a 
sagacious  man  in  power  as  prime  minister,  divest  it  of  the  re- 
sponsibility of  having  to  find  food  for  the  ])eople !  May  you 
never  find  a  prime  minister  again  to  undertake  that  awful 
responsibility !  That  responsibility  belongs  to  the  law  of  na- 
ture. As  Burke  said,  '  it  belongs  to  God  alone  to  regulate  the 
supply  of  the  food  of  nations. '  .  .  .  We  have  set  an  example 
to  the  world  in  all  ages:  we  have  given  them  the  representa- 
tive system.  The  very  rules  and  regulations  of  this  House 
have  been  taken  as  the  model  for  every  representative  assem- 
bly throughout  the  whole  civilized  world;  and  having  besides 
given  them  the  example  of  a  free  press,  and  civil  and  relig- 
ious freedom,  and  every  institution  that  belongs  to  freedom 
and  civilization,  we  are  now  about  giving  a  still  greater  ex- 
ample; we  are  going  to  set  the  example  of  making  industry 
free,  to  set  the  example  of  giving  the  whole  wtirkl  every  ad- 
vantage oi  clime  and  latitude  and  situation,  relying  ourselves 
on  the  freedom  of  our  industry.  Yes,  we  are  going  to  teach 
the  world  that  other  lesson.  Don't  think  there  is  anything 
selfisli  in  this,  or  anything  at  all  discordant  with  Christian 
principles.  1  can  prove  that  we  advocate  nothing  but  what 
is  agreeable  to  the  highest  behests  of  Christianity.  To  buy 
in  the  cheapest  market  and  sell  i  -  the  dearest.     What  is  the 


Is 


f}?f 


THE  CORN  LAWS. 


233 


meaning  of  the  maxim  ?  It  means  that  you  take  the  article 
which  you  have  in  the  greatest  abundance,  and  with  it 
obtain  from  others  that  of  which  they  have  the  most  to 
spare,  so  giving  to  mankind  the  means  of  enjoying  the  full- 
est abundance  of  earth's  goods,  and  in  doing  so  carrying  out 
to  the  fullest  extent  the  Christian  doctrine  of 'Do  ye  to  all 
men  as  ye  would  they  should  do  unto  you. '  "  The  passing 
of  the  measure  was,  however,  more  than  certain,  and  after  a 
debate  of  twelve  nights'  duration  on  Mr.  Miles's  amendment, 
the  government  olttained  a  majority  of  97,  337  having  vuted 
for  the  motion,  and  240  against  it.  And  from  that  evening 
the  corn  law  may  be  said  to  have  expired.  ^  Not  a  day  too 
soon  certainly,  when  we  consider  the  straitened  resources 
of  the  country  as  regards  the  first  article  of  food,  caused  not 
only  by  the  bad  crop  of  grain,  l)ut  by  the  serious  loss  of  the 
potato  crop,  esiiecially  in  Ireland. 

Ireland  has  often  grievously  suffered  from  social  and 
political  wrongs,  from  absenteeism  and  repeal  cries,  from 
Protestant  and  Roman  Catholic  bigotry,  from  Orangeism 
and  Ribbonism,  from  threatening  notices  and  mid-day  assas- 
sinations, but  seldom  has  her  cup  of  adversity  been  so  brim- 
ful as  in  1845  and  1846,  from  the  failure  of  the  potato  crop. 
Though  comparatively  of  recent  introdtiction,  the  first  ])otato 
root  having  been  imported  by  Sir  Walter  Raleigh  in  IGIO, 
potatoes  had  for  years  constituted  a  large  proportion  of  the 
food  of  the  people  of  Ireland.  A  consideral)le  acreage  of 
land  was  devoted  to  that  culture,  and  an  acre  of  potatoes 
would  feed  more  than  doul)le  the  numl)er  of  individuals  that 
can  be  fed  from  an  acre  of  wheat.  Such  cultivation  was, 
moreover,  very  attractive  to  small  holders  of  land.  It  cost 
little  labor.  It  entailed  scarcely  any  expense,  and  little  or 
no  care  was  bestowed  on  it,  since  the  people  were  quite 
satisfied  with  the  coarsest  and  most  prolific  kind,  called 
lumpers  or  horse  potatoes.  Nor  was  it  the  food  of  the  people 
only  in  Ircliind.  Pigs  and  poultry  shared  the  potatoes  with 
the  peasant's  family,  and  often  became  the  inmates  of  his 


ll 


1  9  anil  10  Vict.  c.  22,  suspended  by  10  and  11  Vict.  c.  1. 


\rt 


MMMiiMMMtaiMikiMMH 


234 


ECONOMIC  HISTORY. 


HI 


;i  r 


u  I      ! 


cabin  also.  One  great  evil  connected  with  potato  culture  is 
that,  while  the  crop  is  precarious  and  uncertain,  it  cannot 
1)0  stored  up.  The  surplus  of  one  abundant  year  is  quite  un- 
fit to  use  ill  the  next,  and  owing  to  its  great  bulk  it  cannot 
even  be  trans[)ortod  from  place  to  place.  Moreover,  once 
used  to  a  description  of  food  so  extremely  cheap,  no  retrench- 
ment is  possible,  and  when  blight  comes  and  the  crop  is 
destroyed  the  people  seem  doomed  to  absolute  starvation. 
This,  unfortunately,  was  the  case  in  1822  and  1831.  In 
those  years  public  subscriptions  were  got  up,  king's  letters 
issued,  balls  and  bazaars  held,  and  public  money  granted. 
But  in  1845  and  1846  the  calamity  was  greater  than  any 
previously  experienced. 

The  potato  disease  first  manifested  itself  in  1845.  The 
early  croj),  dug  in  September  and  October,  which  consists  of 
one  sixth  of  the  whole,  nearly  escaped  ;  but  the  whole  of  the 
late  crop,  the  people's  crop,  dug  in  December  and  January, 
was  tainted  before  arriving  at  maturity.  In  that  year  there 
was  a  full  average  crop  of  wheat.  Oats  and  barley  were 
abundant,  and  turnips,  carrots,  and  greens,  including  liay, 
were  sufficient.  Yet  on  the  continent  the  rye  crop  failed, 
and  the  potato  disease  appeared  in  Belgium,  Holland, 
France,  and  the  west  of  Germany.  On  the  whole  the  supply 
of  grain  was  fair  during  the  year  1845,  and  prices  ruled  mod- 
erately high.  In  1840,  however,  the  blight  attacked  the 
potatoes  with  even  greater  fury  and  suddenness  in  the  month 
of  July,  and  it  attacked  both  the  early  crop  and  the  people's 
crop  at  the  same  time  that  the  wheat  crop  proved  under  an 
average.  Barley  and  oats  werr  also  deficient,  and  the  rye 
crop  again  failed  on  the  Coiument.  In  the  previous  year 
some  counties  in  Ireland  escaped  the  potato  disease,  but  this 
year  the  whole  country  suffered  alike.  The  loss  was  indeed 
very  great.  Probably  £13,000,000  was  a  low  estimate,  and 
from  4,000,000  to  5,000,000  (piarters  of  grain  at  least  would 
be  rcquireil  to  rei)laoc  it.  As  might  be  expected  the  news 
of  such  a  disaster  had  a  fearful  eifect  throughout  the  coun- 
try, and  the  utter  helplessness  of  many  millions  of  our 
fellow-subjects  became  a  subject  of  the  greatest  anxiety. 


m 


THE  CORN  LAWS. 


235 


lis 


\IY 


As  soon  as  the  potato  disease  appeared  in  1845,  govern- 
ment took  the  step  of  appcnnting  jirofessors  Kane,  Lindley, 
and  Phiyfair  to  inquire  into  tlie  nature  of  the  disease,  and  to 
suggest  means  for  preserving  the  stoek,  but  this  was  of  little 
avail.  Urged  by  necessity,  the  government  even  stepped 
out  of  its  province  and  sent  orders  to  the  United  States  for 
the  purchase  of  £100,000  worth  of  Indian  corn,  established 
depots  in  different  jtarts,  and  formed  relief  committees. 
But  this  was  nothing  compared  with  what  became  necessary 
to  be  done  in  1846.  Public  works  were  then  commenced  on 
a  large  scale,  giving  employment  to  some  five  hundred  thou- 
sand ))erson8.  The  poor  law  was  put  in  action  with  unparal- 
leled vigor,  so  that  in  July,  1847,  as  many  as  three  millions 
of  persDUs  were  actually  receiving  separate  rations.  A  loan 
of  iE 8, 000, 000  was  contracted  by  the  government,  ex])ressly 
to  supply  such  wants,  and  every  step  was  taken  by  two  suc- 
cessive administrations  —  Sir  Robert  Peel's  and  Lord  John 
Russ  'I's  —  to  alleviate  the  sufferings  of  the  people.  Nor 
was  private  benevolence  lacking.  The  Society  of  Friends, 
always  ready  in  acts  of  charity  and  love,  was  foremost  in  the 
good  work.  A  British  Association  was  formed  for  the 
relief  of  Ireland,  including  Jones  Loyd  (Lord  Overstone), 
Thomas  Baring,  and  Baron  Rothschild.  A  Queen's  letter 
was  issued.  A  day  of  general  fast  and  humiliation  was  held, 
and  subscriptions  Avcre  received  from  almost  every  quarter 
of  the  world.  The  Queen's  letter  alone  produced  £171,533. 
The  British  Associati(m  collected  £263,000;  the  Society  of 
Friends,  £43,000;  and  £168,000  more  were  intrusted  to  the 
Dublin  Society  of  Friends.  The  Sultan  of  Turkey  sent 
£1,000.  The  Queen  gave  £2,000  and  £500  more  to  the 
British  Ladies'  clothing  fund.  Prince  Albert  gave  £500. 
The  National  Club  collected  £17,030.  America  sent  two 
shijjs  of  war,  the  "Jamestown"  and  ''Macedonian"  full  of 
provisions;  and  the  Irish  reaidiMits  in  the  United  States  sent 
upwards  of  £2(10, 000  to  their  relatives  to  allow  them  to  emi- 
grate. But  with  all  this,  the  i)eo[)le  passed  through  a  most 
eventful  catastrophe.  One  third  of  the  people  at  least  was 
reduced  to  destitution.     A  largo  number  died  by  fever  and 


t 


St  '■ 


''  l'»K 


286 


ECONOMIC  HISTORY. 


A 


ptslilencc.  Such  as  could  raise  the  requisite  funds  emi- 
grated to  America.  Crowds  of  emaciated  and  famished 
people  flocked  by  every  available  means  to  English  ports. 
The  rest  were  kept  alive  by  employment  on  j)ublic  works,  by 
private  local  charity,  by  local  subscriptions,  by  contribu- 
tions from  all  parts  of  the  world,  and  by  the  most  extensive 
system  of  gratuitous  distribution  of  food  which  history 
affords  any  record  of. 

The  i)rice  of  wheat  and  other  grain  did  not  rise  much  at 
first.  Indeed  for  a  lengthened  time  but  faint  C()nce[)tion  was 
entertained  of  any  want  of  foreign  grain.  The  potato  failure 
was  comparatively  a  new  thing,  a..d  few  imagined  that  it 
would  act  powerfully  on  the  consumption  of  grain.  Iil  1845 
the  average  ])ricc  of  wheat  was  no  more  than  50s.  lie?,  per 
imperial  quarter,  it  having  risen  from  a  mininuuu  of  45s. 
3t/.  in  March  to  58s  lOJ.  in  November;  while  the  average 
price  of  barley  was  31s.  8d,  and  of  oats  22s.  (>(/.  In  1846, 
also  the  average  price  of  wheat  was  54s.  8<?.,  the  jtricc  having 
ruled  first  55s.  G(7.,  falling  to  4Gs.  3(7.  in  August,  and  rising 
to  GOs.  7(7.  in  Noveml»ei',  while  the  average  price  of  l)arley 
was  32s.  8(7.  and  of  oats  23s.  8(7.  I>ut  in  1847  a  sudden  great 
rise  took  i)laee.  The  price  of  wheat  rose  from  an  average  of 
GOs.  11(7.  in  January  to  an  average  of  92s.  10(7.  in  June ;  the 
price  of  barley  was  50s.  2(7.  in  Jamiary,  53s.  5t7.  in  Febru- 
ary, ami  52s.  11(7.  in  May  and  June;  and  oats,  conmieneing 
at  20s.  GiL  in  January,  rose  to  34s.  2(7.  in  June.  In  July, 
however,  a  sudden  change  took  jilaec  by  the  concurrent  ac- 
tion of  large  importaticms  and  excellent  prospects  of  the 
approaching  harvest.  From  June  to  December  wheat  fell 
from  02s.  10<7.  to  52s.  3.7. ;  barley  from  52.s.  Ilt7.  to  30s. 
0/7.  ;  and  oats  from  34s.  2(7.  to  21s.  10(7.  i)er  imj)erial 
quarter.  The  importation  of  grain  had  lU'ver  been  so  large 
as  in  this  year.  In  former  years  1,000,000  or  2,000,000 
quarters  was  the  maxinuun,  but  in  184G  the  imp(trts 
amounted  to  4,752,174  ijuarters  of  grain  and  meal,  and  in 
1847  to  as  much  as  11,012,8G4  quarters,  the  greatest  in- 
crease having  taken  idacc  from  Russia  and  America.  Then, 
indeed,  the  nation  realized  that  the  corn  law  could  not  be 


THE   CORN  LAWS. 


237 


•11 

ul 

,ir(.' 
("" 

•ts 
ill 


maintained  any  longer.  Onr  dependence  on  foreign  grain 
became  very  great,  and  thankful  indeed  we  were  that  by  the 
wisdom  and  foresight  of  our  legislators,  the  last  corn  law  and 
the  navigation  law  were  alike  suspended,  and  our  ports  were 
opened  to  the  su[)ply  of  food  from  any  quarter  of  the  globe. 

Another  important  consequence  of  the  potato  disease  was 
an  enormous  stimulus  to  emigration.  Great  is  the  change  in 
the  state  of  public  opinion  and  law  as  respects  emigration. 
In  oldon,  yet  not  very  remote  times,  an  absolute  prohil)!tion 
existed  against  the  departure  of  artisans  from  this  countiy, 
and  we  would  have  regarded  as  a  dire  misfortune  the  dejiart- 
ure  of  hundreds  and  thousands  of  families  from  our  shores 
in  quest  of  hap[)icr  homes  and  more  fruitful  sources  of  indus- 
try. Now  we  see  whole  fleets  of  emigrant  ships  carrying 
away  many  of  the  ablest  and  most  industrious  of  our  work- 
ing population,  without  a  murmur  of  complaint  or  a  feeling 
of  sorrow.  And  why  ?  because  we  feel  that  they  only  obey 
the  law  of  nature,  which  is  always  foreseeing  and  beneficent. 
Even  savages  are  impelled  by  their  economical  condition  to 
lie  always  moving  in  quest  of  food ;  and  when  civilization 
created  new  wants,  a  still  greater  impulse  was  given  to 
migrations  from  place  to  place.  Sometimes  religious  and 
political  dissensions  have  been  the  causes  of  great  emigra- 
tion. Jhit  motion  is  a  law  of  human  society,  and  endless 
processions  arc  always  moving,  now  from  south  to  north, 
and  anon  from  north  to  south;  at  one  time  from  west  to  east, 
and  at  audthcr  Iroiii  east  to  w(>st.  As  for  this  ct)untry  the 
constant  alternation  of  times  of  prosperity  and  distress  in 
commerce  and  manufnctures  renders  it  the  more  necessary 
tor  our  working  people  to  have  other  outlets  for  their  indus- 
tries than  are  alTorded  within  these  circumscribed  islands, 
and  it  is  fortunate  that  the  colonies  are  ever  open  for  the 
employment  of  any  numl)er  of  laborers.  As  early  as  1826 
and  1827  the  subject  of  emigration  engagedthe  atteiitidii  of 
the  House  of  Commons,  and  th(>ir  recommendation  was  that 
the  emigrants  should  be  settled  upon  land  granted  by  the 
State,  and  that  whatever  fund  be  advanced  for  their  l)enefit 
should  be  subject  to  repayment.     In  1831  a  royal  cominis- 


>;? 


■■'I 


i 


M 


!.: 


288 


ECONOMIC  HISTORY. 


sion  inquired  into  the  subject,  and  while  it  did  not  approve 
of  any  direct  grant  of  money  for  emigration  to  Canada  and 
otlier  North  American  colonies,  it  recommended  that  as  re- 
spects New  South  Wales  and  Van  Diemen's  Land  the  pro- 
ceeds of  public  land  sold  should  be  devoted  as  loans  of  .£'20 
and  upwards  towards  the  passage  money  of  fauiilies  of  me- 
chanics and  agricultural  laborers,  and  as  bounties  of,  and 
towards  the  conveyance  of,  young  unmarried  females.  This 
recommendation  was  subsequently  adopted  and  carried  out 
by  the  colonial  olhce,  and  then  a  loan  for  the  Australian 
emigrants  was  converted  into  a  free  gift  and  increased  to 
j£30,  the  bounty  to  single  females  being  also  increased  to 
X30.  But  notwithstanding  these  encouragements,  the  emi- 
gration from  the  United  Kingdom  continued  very  limited  for 
a  long  time.  For  sixteen  years,  from  1815  to  1830,  the 
average  number  of  emigrants  was  only  23,000  per  annmn, 
most  of  whom  went  to  the  North  American  colonies  and  the 
United  States  of  America.  From  1831  to  1840  the  average 
number  of  emigrants  increased  to  70,000  per  annum,  Aus- 
tralia then  connnencing  to  attract  great  attention ;  and  from 
1841  to  184G  the  average  still  further  increased  to  100,000. 
But  in  1847  and  subsequent  years  the  stream  of  emigration 
flowed  in  a  most  rapid  manner.  Ireland  sent  forth  the 
greater  part  of  her  lal)oriug  population,  and  in  thedecennium 
from  1847  to  18r»G  the  nimiber  of  emigrants  actually  in- 
creased to  280,000  per  annum.  It  was  a  |ti(ifiil  sight  to  see 
those  crowds  of  worn-out  Irish  embarking  in  rags  and  jienni- 
less  for  a  foreign  shore.  But  they  went  away  from  a  i)lace 
of  sorrow  and  sulTering  to  a  country  which  seemed  to  open 
a  boundless  field  for  the  exercise  of  honest  industry.  Nor 
was  the  benefit  of  emigration  limited  to  th(>  emigrants  them- 
selves. The  advantage  was  quite  as  great  to  the  mother 
country.  Here  they  added  nothing  to  national  wealth. 
They  constituted  the  mortified  ])art  of  the  social  system 
which  needed  amputation.  There,  not  only  they  ceased  to 
trench  upon  the  labor  of  others,  l)ut,  after  providing  food 
for  themselves  they  became  large  customers  for  our  produce 
and  manufactures. 


■u 


1^  i'  ^^  ^  ?'f 


w 


THE  CORN  LAWS. 


239 


Ere  wc  pass  from  the  repeal  of  the  corn  law  and  its  conse- 
quences, reference  must  be  made  to  an  achieveini'nt  certainly 
not  less  important  in  relation  to  the  economic  policy  of  the 
country,  the  rci)cal  of  the  navigation  law.  In  1845  these 
laws  were  consolidated,  and  it  seemed  as  if  they  were  to 
continue  for  many  a  year  in  existence,  but  the  necessity  for 
suspending  their  operation  in  1846  and  1847,  and  the  pro- 
gress of  public  opinion  in  matters  of  free  trade  suggested 
an  inquiry  into  the  operation  and  policy  of  sucli  laws  in 
1847.  Of  that  committee  Mr.  Milner  Gibson  was  chairman, 
and  during  tlie  year  they  published  five  reports  on  the 
subject  containing  valuable  evidence,  tending  to  show  the  ob- 
jections to  such  laws  and  the  injury  which  they  caused,  not- 
withstanding their  restricted  operation, —  a  large  portion  of 
the  trade  being  no  longer  protected  by  them.  Evidence  was 
given  to  the  effect  that,  looking  to  the  geographical  position 
of  this  country,  and  to  the  peculiar  energy  of  her  people,  the 
extent  of  her  trade,  her  great  capital,  and  her  success  in 
maritime  enterprise,  there  need  be  no  limit  to  the  prosperity 
of  her  shipping  were  it  not  for  the  restrictions  and  unneces- 
sary charges  imposed  on  it  by  the  Navigation  Act,  the  Regis- 
try Act,  and  several  other  acts.  It  was  urged  that  if  we 
could  reduce  the  cost  of  ships  and  consequently  of  freights, 
we  should  increase  trade  to  an  enormous  extent;  that  the 
immense  traffic  which  railways  occasioned  in  this  country 
was  the  strongest  proof  that  cheap  conveyance  on  the  sea 
would  be  attended  with  similar  results,  and  that  we  should 
not  only  obtain  a  much  larger  quantity  of  goods  than  have 
hitherto  come  to  market,  but  that  we  should  find  new  ex- 
changealde  commodities  wliich  did  not  then  como  here;  that 
we  should  bring  the  timber  of  India  or  Australia  at  half  its 
present  cost ;  and  that  we  should  carry  on  the  fisheries  to  a 
much  greater  extent,  and  be  enabled  to  increase  every  branch 
of  industry  in  this  and  other  countries  to  a  very  large  extent. 
Shipowners  certainl\;_prognosticated  all  manner  of  evil 
likely  to  arise  from  the  repeal  of  the  navigation  laws.  They 
warned  the  nation  that  such  laws  had  raised  it  to  the  station 
it  held,  and  that  without  them  it  would  as  rapidly  go  down 


I 
pii 


f 

t 


\tA. 


■\-\ 

-  i 

]^"' 

IP  ' 

240 


ECONOMIC  HISTORY. 


as  it  had  risen.  They  were  certain  that  the  repeal  of  such 
laws  would  reduce  shipping  property  fully  30  j)er  cent  in 
value,  and  introduce  the  cheap  navigation  of  other  countries 
in  competition  with  the  costly  navigation  of  this  country, 
and  that,  despairing  of  success,  the  British  shipowner  must 
retire  from  the  contest.  Really,  however,  the  advocates  of 
the  navigation  laws  had  little  to  say  in  their  favor  based  on 
substantial  facts.  The  committee  made  no  report  in  1847, 
but  the  general  impression  was  that  the  rejjcal  of  such  laws 
would  benefit  trade,  and  that  the  necessity  for  action  had 
become  imminent. 

Accordingly,  in  1848,  as  soon  as  public  attention  could  be 
given  to  the  subject,  Mr.  Labouchere,  in  committee  of  the  whole 
house,  moved  a  resolution  to  the  effect,  "That  it  is  expedient 
to  remove  the  restrictions  which  [)revent  the  carriage  of  goods 
by  sea  to  and  from  the  United  Kingdom  and  the  British  pos- 
sessions abroad,  and  to  amend  tlie  laws  regulating  the  coast- 
ing trade  of  the  United  Kingdom,  subject,  nevertheless,  to 
such  control  as  may  be  necessary,  and  also  to  amend  the  laws 
for  the  registration  of  ships  and  seamen."  But  a  concerted 
opposition  was  made  to  such  ju-oposition,  and  Air.  I  ferries 
moved  a  counter  resolution,  "That  it  is  essential  to  the 
national  interest  of  the  country  to  maintain  the  finulamentul 
principles  of  the  navigation  laws,  subject  to  such  modifica- 
tions as  may  be  best  calculated  to  obviate  any  jjroved  incon- 
venience to  the  commerce  of  the  United  Kingdom  and  its 
dependencies,  and  without  danger  to  our  national  strength." 
The  discussi(m  was  long  and  animated,  and  the  two  oppos- 
iuir  views  were  fully  enforced  and  illustrated;  luit  it  ended, 
as  might  have  been  expected,  in  the  defeat  of  ^\v.  [Terries' 
amendment  by  a  majority  of  294  against  177.  But  the  ses- 
sion was  lost,  and  the  subject  had  to  be  deferred  to  another 
year.  Again,  however,  in  1849  Mr.  Labouchere  proposed 
the  same  resolution,  only  adding  that  provision  should  be 
made  givin<r  power  to  the  Queen  in  council  to  re-enact  these 


hiws,  wholly  or  in  ]iart,  with  regard  to  any  countries  as  to 
which  the  government  might  think  fit  that  they  should  be 
preserved.     Power  was  given  to  him  to  bring  in  a  bill,  and 


\\f 


THE  CORN  LAWS. 


241 


it  was  read  a  second  time  by  a  inajoi-ity  of  200  to  210.  As 
originally  proposed  the  bill  was  inti'nded  to  tlirow  open  the 
coasting  trade  as  well  as  the  foreign  trade,  bnt  the  govern- 
ment of  the  United  States  having  notilied  their  refnsal  to 
reciprocate  this  concession,  and  some  objection  having  been 
raised  by  the  department  of  customs  because  of  the  dilliciilty 
of  enforcing  efVectual  regulations  to  guard  the  revenue  from 
danger,  the  clauses  relating  to  the  coasting  trade  were  with- 
drawn, and  the  bill  passed  into  law.^  But  even  the  restric- 
tion of  the  coasting  trade  was  ultimately  relin(piished,  and 
both  the  navigation  on  the  coast  of  the  United  Kingdom  and 
the  manning  of  British  ships  were  left  entirely  free.'* 

1  12  ami  13  Vict.  c.  29. 

2  10  and  17  Vict.  c.  107,  and  17  and  18  Vict.  c.  120. 


.,  34! 


m 


16 


■Vijiii'*^ 


¥& 


Hi 


242 


ECONOMIC  111  STORY. 


X. 


THE  NEW  GOLD. 


FitOM  Caiunes'  Essays  in  Political  Economy.* 


;l  I 


KSSAY  11.  — THE  COURSE  OF  DEPRECIATION. 

NO  one,  I  think,  who  has  attended  to  the  discii.ssions 
occasioned  by  the  recent  gold  discoveries,  can  have 
failed  to  observe,  on  the  part  of  a  large  number  of  those 
who  engage  in  them,  a  strange  unwillingness  to  recognize, 
among  the  inevitable  consequences  of  tho.sc  events,  a  fall 
in  the  value  of  money.  I  say,  a  strange  unwillingness,  be- 
cause we  do  not  lind  similar  doubts  to  e.xist  in  any  corre- 
sponding case.  With  respect  to  all  other  commodities,  it 
is  not  denied  that  whatever  facilitates  ])roduction  jtromotcs 
cheapness ;  that  less  will  be  given  for  objects  when  they  can 
bo  attained  with  less  trouble  and  sacrifice.  It  is  not  denied, 
for  example,  that  the  .steam-engine,  the  spinning-jenny,  and 
the  mule  have  lowered  the  value  of  our  manufactures ;  that 
railways  and  steamships  have  lessened  the  expense  of  travel- 
ling, or  that  the  superior  agricultural  resources  of  foreign 
countries,  made  available  through  free  trade,  keep  down  the 
price  of  our  agricultural  ])roducts.  It  is  only  in  the  case  of 
the  precious  metals  that  it  is  supposed  that  a  diminution  of 
cost  has  no  tendency  to  lower  value,  and  that,  however 
rapidly  supply  may  be  increased,  a  given  quantity  will  con- 
tinue to  command  the  same  quantity  of  other  things  as  before. 
Among  persons  unacquainted  with  economic  science,  the 
prevalence  of  tliis  opinion  is  doubtless  principally  due  to 
those  ambiguities  of  language,  and  consequent  confusion  of 
ideas,  with  which  our  monetary  phraseology,  unfortunutely, 

1  London :  McMillan  and  Co.,  1873. 


THE  NEW  GOLD. 


243 


abounds,  many  of  wliicli  tend  to  oiicournf^c  the  notion  of  some 
peculiar  and  countant  stability  in  tlio  value  of  the  precious 
nictals.  TbuH,  tlio  expression  "a  fixed  price  of  gold"  has  led 
sonic  people  to  imagine  that  the  ])ossibility  of  a  depreciation 
of  this  metal  is  precluded  by  our  mint  regulations.  The 
double  sense,  again,  of  the  phrase,  "  value  of  money,"  has 
countenanced  the  same  error  ;  for  people,  perceiving  the  rate 
of  interest  (which  is  the  measure  of  the  value  of  money,  in 
one  sense  of  the  phrase)  remaining  high,  while  the  supply  of 
gold  was  rapidly  increasing,  —  perceiving  money  still  scarce 
according  to  this  criterion,  notwithstanding  the  increase  in  its 
j)roduction,  —  have  asked  whether  this  did  not  alTord  a  pre- 
sumption that  its  value  would  be  permanently  preserved  from 
depreciation,  a  biink  rate  of  discount  at  (5,  8,  or  10  per  cent, 
as  they  remarked,  ai't'ording  small  indication  of  money  becom- 
ing too  abundant. 

It  a]»i)ears  to  mo,  however,  that  misconceptions  respecting 
the  influence  of  an  increased  supply  of  gold  upon  its  value, 
and  upon  general  ])rices,  are  by  no  means  confined  to  the  class 
who  could  bo  misled  by  such  fallacies,  but  that  even  among 
economists  (at  least  among  economists  in  this  country)  wc  may 
observe  the  same  indisposition  to  believe  in  an  actual  and  pro- 
gressive depreciation  of  this  metal.  It  is  not,  indeed,  denied 
—  at  least,  1  presume  it  is  not  denied  —  by  any  one  pretend- 
ing to  economic  knowledge,  that  the  enlarged  i)roduction  of 
gold  now  taking  place  has  a  tendency  to  lower  its  value ;  but 
it  seems  to  be  very  generally  supposed  that  the  same  cause  — 
the  increased  gold  production  —  has  the  cITect,  through  its 
inlluence  on  trade,  of  calling  into  operation  so  many  tenden- 
cies of  a  contrary  nature  that,  on  the  whole,  the  depreciation 
nnist  proceed  with  extreme  slowness,  the  results  being  dis- 
persed over  a  period  so  great  as  to  take  from  them  any  prac- 
tical importance,  and  that,  at  all  events,  up  to  the  present 
time  no  sensible  effect  upon  prices  proceeding  from  this  cause 
has  become  perceptible. 

The  existence  of  this  opinion  among  economists  is,  I  appre- 
hend, to  be  attributed  in  some  degree  to  the  circumstance  that 
so  few  have  taken  the  pains  to  compare  the  actual  prices  of 


m 


in 


■  .'I'l 


IM 


^^ 


.1 1 


^^  7, 


11 


hnn 


ii 


: '  i'; 


244 


ECONOMIC  msTony. 


the  preaont  liino  with  (hose  of  tlin  period  previous  to  (lie  jijold 
(liHoovericM,  but  much  more  to  the  liict  that  tiic  cluiracter  of 
tlie  new  agency  and  the  mode  of  its  operation  arc  not,  in 
general,  correctly  conceived.  I  heliiive  the  most  general 
opinion  with  reference  to  the  action  of  an  increased  supply 
of  money  upon  its  value  is,  that  it  is  nnii'orm,  talves  place, 
that  is  to  say,  in  the  same  degree  in  relation  to  all  commodi- 
ties and  services,  and  (hat  therefore  jtrices,  so  far  ns  they  are 
inlluenced  by  an  increase  of  nioney,  must  exhibit  a  nniform 
advance;'  and,  no  such  unifi)rmity  being  observed  in  the 
actual  muvemcnt  of  prices,  the  ini'erenee  has  not  nnnaturally 
been  drawn  that  such  eidiancement  as  has  taken  plac(!  is  not 
due  to  this  cause ;  that  it  is  nut  money  which  has  fallen,  but 
commodities  which  have  risen  in  value. 

Now  1  am  (piite  ])repar('d  tt)  admit  that  an  increase  of 
money  tends  nltimately,  where  the  conditions  of  j)r('  luction 
remain  in  other  respects  the  same,  to  affect  the  prices  of  all 
commodities  and  services  in  an  c(|ual  degree;  but  before  this 
result  is  attained  a  period  of  time,  longer  or  shorter  acconling 
to  the  amount  of  the  augmentation  and  the  general  circum- 
stances of  commerce,  must  elapse.  In  the  j)resent  instance 
the  additions  which  are  bi-ing  made  (o  the  monetary  systems 
of  the  world  are  upon  an  enormous  scale,  and  the  dis(urbanco 
eU'ected  in  the  relation  of  prices  is  j»ropor(ionally  great. 
Under  such  circumstances  it  is  very  ])ossible  (hat  the  ine(iuali- 
(ics  resulting  may  not  find  their  correction  throughout  the 
whole  period  of  progressive  depreciation, — a  jioriod  which, 
even  with  our  present  facilities  of  production  and  distribution, 
may  easily  extend  over  some  thirty  or  forty  years.  During 
(his  transitionary  term  the  action  of  the  new  gold  will  not  l)e 
uniform,  but  j)artial.  Certain  classes  of  commodities  and 
services  will  bo  afTected  much  more  powerfully  than  others. 
Prices  generally  will  rise,  but  with  unecinal  steps.     Ncvorthn- 

■1  "In  relation  to  the  Influence  of  the  gold  discoveries  on  the  pr'  il 

cultural  proiluee,  it  is  plain  that  it  could  ho  only  the  sai" 
those  of  any  other  class  of  commodities.     If  it  has  caiiH'  m 

then  ftiror,  il  must  liarecHiisetl  a  rise  of  '20  fxr  ciiU  in  rreri,  se."     ^  es," 

City  article,  August  G,  185"J.)  And  the  same  assumption,  i  r  expre8>  .  or  im- 
plied, runs  through  most  of  the  reasoning  whicli  I  have  seen  on  this    uestion. 


'V 


THE  NEW  GOLD. 


245 


less  thcfp  will  1)0  in  tlioso  npparcnt  irrcgiilariticfl  notliiiii^ 
L'itlior  (.'ii|n'ii'i()ii8  or  nliiiorniiil.  Tlic  inovcinont  will  Ik;  fj^ov- 
criu'd  (liPoMjfliout  iirt  coiii'sc  hy  ocoiiomic  laws;  niul  it  is  (iio 
|)ur|)os(^  nf  tiic  pri'scnt  iiKjuirv  to  iisccrtiiin  the  nature  of 
tlicso   laws  and  the   niodo  ol"  tln'ir  operation. 

Tlio  process  by  wliieli  an  increased  production  of  p)ld  oper- 
ates in  depreeiatiiiff  the  value  of  the  metal  and  rai.sinjf  general 
prices  appears  to  he  twofold;  it  acts,  first,  i/ircctli/  through 
the  medium  of  an  enlarji'.j*!  money  denuxnd,  and  secondly, 
iihh'irrf/i/  through  a  contraction  of  supply.* 

When  an  increased  amount,  of  money  conies  into  existence, 
there  is,  of  course,  an  increased  expenditure  on  the  part  of 
those  into  whose;  possession  it  comes,  the  immediate  effect  of 
which  is  to  raise  the  prices  of  all  connnodities  which  fall  under 
its  inlluencc.  It  is  obvious,  lu^wever,  that  the  advance  in 
price  whitdi  thus  occurs  will  be,  in  its  full  extent,  tcMuporary 
only;  since  it  is  innnediately  followed  by  an  extension  of  i>ro- 
duction  to  meet  the  increased  dennind,  and  this  must  again 
lead  to  a  fall  in  price.  Some  writers  who  have  treated  this 
question,  ol)serving  this  effect,  have  somewhat  hastily  con- 
cluded that  under  the  ojieration  of  this  principle  thi;  level  of 
prices  wotdd  never  permanently  be  altered,  since,  as  they 
have  urged,  each  addition  to  the  circulating  medium  forming 
the  basis  of  a  corresponding  increase  of  demand,  gives  a 
corresponding  impetus  to  production  ;  every  increase  of 
money  thus  calls  into  existence  an  equivalent  augmentation 
in  the  quantity  of  things  to  l)c  circulated  ;  and  the  proportion 
between  the  two  not  being  ultimately  disturbed,  prices,  it  may 
be  presumed,  will  return  to  their  original  level.''*     The  least 

•  Acconlins  to  Mr.  Nowmarcli  ("  History  of  TriL'ts,"  vol.  iv.,  pp.  224-225), 
tlif  <li'prwi!iti()ii  of  inoiu-y  may  oi'ciir  by  a  process  wliicli  is  iicitiier  cf  tlu'so, 
wlii'ii  iiioiK'y  oiuTiiti's  upon  pricos  ncitlior  tliroiifili  tli'iiuitiil  nor  yet  tiiroiii;li 
supply,  Itut  "  by  rcnson  of  aiijjmpiitod  quantity."  I  must  confess  myself  wholly 
unable  to  conceive  the  process  bere  indicated. 

•^  [It  may  be  worth  while  to  ])reserve  a  specimen  of  the  sort  of  I'olitioal 
Economy  tliat  was  talkeil  and  written  on  this  subject  some  fifteen  years  ago. 
A  leadin{j  article  in  the  Extiminrr  (December  \?,,  1S50)  contains  the  fnllowin);: 
"The  additional  supply  of  the  precious  metal.s  has  stimulated  the  industry  of 
the  world,  and  in  fact  produced  an  amount  of  wealth  in  representing  which 
they  have   been    themselves,  as  it  were,  absorbed.  .  .  .  But  the  produce  of 


W.'^ 


V  'i 


•^1 


|o 

|i 


.It 


I 

I 


246 


ECONOMIC  HISTORY. 


reflection,  however,  will  sliow  that  this  doctrine  has  been 
suggested  by  a  very  superlicial  view  of  the  phenomena. 

For  —  not  to  press  the  obvious  reductio  ad  ahsurdum  to 
wliich  this  argument  is  liable  —  how  is  this  extension  of  pro- 
duction to  bo  carried  out  ?  In  the  last  resort  it  is  only  j)ossiblc 
through  a  more  extended  employment  of  labor.  IJut,  when 
once  all  the  hands  in  a  community  are  employed,  the  effect  of 
a  further  competition  for  labor  can  only  be  to  raise  wages ; 
and,  wages  once  being  generally  raised,  it  is  plain  (supposing 
all  other  things  to  remain  the  same)  that  profits  can  only  be 
maintained  by  a  corresponding  elevation  of  prices.  When, 
therefore  the  iulluencc  of  the  new  money  has  once  reached 
Avages,  it  is  evident  that  there  will  be  no  motive  to  continue 
])roduclion  to  that  point  which  would  bring  prices  to  their 
former  level,  and  that  consequently  an  elevation  of  ])ri('o  must, 
at  this  stage  of  the  proceeding,  be  j)ermanently  established. 

So  far  as  regards  articles  which  fall  dirccthf  under  the 
action  of  the  new  money.  With  respect  to  those  wliieh  do 
not  happen  to  come  within  the  range  of  the  new  demand, 
price  is,  1  conceive,  in  their  case  raised  by  an  indirect  action 
of  the  new  money  in  curtailing  supply. 

We  luive  seen  that  the  effect  of  the  efforts  to  extend  jiro- 
duotion  in  the  directions  indicated  by  the  new  expenditure 
must  1)0  to  raise  wages;  but  it  is  plainly  impossible  that  wages 
should  continue  to  advance  in  any  of  the  principal  depart- 
ments of  industry  without  affoeting  their  rates  in  the  rest; 
whence  it  will  iiappen  that,  under  tlie  operation  of  the  new 
monetary  iuliuencc,  some  departments  of  industry  will  expe- 
rience a  rise  of  wages  before  any  advance  takes  place  in  the 
prices  of  the  now  commodities  produced  by  the  laborers  whose 
wages  have  risen,  it  is  evident  that  in  all  departments  of 
industry  wliieh  may  be  thus  affected — in  which  prices  will 
nut   liavo  shared   the  advance   which    has  affected  wages  — 

tlic  Aiistriilian  ainl  riilifortiian  poM.  as  wi'll  as  that  of  silver  wliicli  has  acconi- 
paiiicil  it,  is  likely  U\  ^'o  on  ;  and  it  may  hi'  aski'il  if  this  must  not  in  conrso  of 
tunc  proiliii'c  ili|)rc(iiiti(>n.  We  'hitik  it  certainly  is  not  likfly  to  do  so ;  .  ,  . 
on  the  contrary,  it  will  surely  be  .bsorbed  by  increasing  wealth  nnd  population 
as  fH"'.  .".o  it  is  produced."] 


sr 


THE  NEW  GOLD. 


247 


uf 
•ill 


profits  will  fall  below  the  general  average ;  the  effect  of  which 
must  be  to  discourage  production  until,  by  a  contraction  in 
the  supply  of  Lie  articles  thus  furnished,  the  price  shall  be 
raised  up  to  that  i)oint  which  will  place  the  producers  on  the 
same  footing  of  advantage  as  those  in  other  walks  of  industry. 

An  increased  supply  of  money  thus  tends,  by  one  mode  of 
its  operation,  to  raise  prices  in  advance  of  wages,  and  thus  to 
stimulate  production ;  by  another,  to  raise  wages  in  advance 
of  prices,  and  thus  to  check  it ;  in  both,  however,  to  raise 
wages,  and  thus  ultimately  to  render  necessary,  in  order  to 
the  maintenance  of  profits,  a  general  and  permanent  elevation 
of  price.^ 

This  being  the  process  by  which  increased  supplies  of 
money  operate  in  raising  prices,  in  order  to  ascertain  the 
laws  of  their  advance,  wo  must  attend,  first,  to  the  direction 
of  the  new  expenditure  ;  secondly,  to  the  facilities  for  extend- 
ing the  supply  of  different  kinds  of  commodities  ;  and,  thirdly, 
to  the  facilities  for  contracting  it. 

With  regard  to  the  first  point,  —  the  direction  of  the  new 
expenditure,  —  this  will  naturally  be  detei-mined  by  the  habits 
and  tastes  of  tho  persons  into  whose  possession  the  new  money 
comes.  These  persons  are  the  inhabitants  of  the  gold  coun- 
tries, and,  after  them,  those  in  other  countries  who  can  best 
supply  their  wants.  Speaking  broadly,  we  may  say  that  the 
persons  who  will  chiefly  benefit  by  the  gold  discoveries  belong 
to  the  middle  and  lower  ranks  of  society  ;  in  a  large  degree  to 
the  lowest  rank,  the  class  of  unskilled  laborers.  The  direction 
of  the  new  exi)enditure  will  consequently  be  that  indicated  by 
the  habits  and  tastes  of  these  classes,  and  the  commodities 

'  It  must  not  be  supposed  that  tliis  is  inconsistent  with  tlie  fundamental  doc- 
trine maintained  by  Hicardo,  tliat  "hijili  wages  do  not  make  higli  prices." 
Tiiat  doctrine  assumes  tlie  value  of  money  to  be  constant.  Hicardo  was  quite 
aware  of  tlie  exception  to  the  general  priuciple,  and  points  it  out  in  tlie  foUow- 
injt  passage:  — 

"Money,  being  a  variable  commodity,  the  rise  of  money  wages  will  bo  fre- 
quently' occasioned  by  a  fall  in  the  value  of  money.  A  rise  of  wages  from  this 
ciiiise  will,  indeed,  be  invariably  accompanied  by  a  rise  in  the  price  of  commod- 
ities; but  in  such  cases  it  will  be  found  that  labor  ancl  all  commodities  have 
not  varied  in  regard  to  each  other,  and  that  the  variation  has  been  confined  to 
money."    (liicardo'ii  Works,  second  edition,  p.  31.) 


II 


fc 


^■Wm 


If;;  'm 

I  If..: 


m 


■  'r? 


,i] 


■  "4 
liii 


B 


248 


ECONOMIC  HISTORY. 


w 

lis'. 

i 


If 


if 


!ii 


ii 


which  will  be  most  affected  by  it  will  be  those  which  fall  most 
largely  within  their  consumption. 

With  respect,  secondly,  to  facilities  for  extending  supply, 
these  will  be  found  to  depend  i)rincipally  upon  two  circum- 
stances:  first,  on  the  extent  to  which  machinery  is  employed 
in  production;  and,  secondly,  on  the  degree  in  which  the  pro- 
cess of  production  is  independent  of  natr.ral  agencies  which 
reciuirc  time  for  accomplishing  their  ends.  The  distinction 
marivcd  by  these  two  conditions,  it  will  be  found,  corresponds 
pretty  accui-ately  with  two  other  distinctions, —  with  the  dis- 
tinction, namely,  between  raw  and  manufactured  products ; 
and,  among  raw  products,  with  that  between  those  derived  from 
the  animal  and  those  derived  from  the  vegetable  kingdom.  An 
article  of  fmisiied  manufacture,  in  the  ])roduction  of  which  ma- 
chinery bears  a  principal  par*^  and  which  is  inde])endent,  or 
nearly  so,  of  natural  processes,  may  after  a  short  notice  be 
rapidly  multiplied  to  meet  any  probable  extension  of  demand. 
An  article  of  raw  produce,  being  in  a  less  degree  inider  the  do- 
minion of  machinery,  and  depending  more  upon  luitural  pro- 
cesses which  require  time  for  their  accomplishment,  cannot 
be  increased  with  the  same  facility;  and  i)roduction  will  con- 
sequently, in  this  case,  be  comparatively  slow  in  overtaking 
an  extension  of  demand.  But  of  raw  products,  those  derived 
from  the  animal  are  still  less  under  the  dominion  of  ma<'hinery 
than  those  derived  from  the  vegetable  kiugdom,au(l  still  more 
dependent  on  the  alow  processes  of  nature,  and,  consequently, 
production  must,  in  their  case,  be  still  more  tardy  in  over- 
taking drnifind.  .'>up])osing,  then,  the  extension  of  demand  to 
bo  in  all  three  cases  the  same,  the  immediate  rise  of  ]irice 
w'xW.,  civt oris  pnrif'>iK,\)o  in  all  the  same;  but  in  the  ease  of 
articles  of  (ini.shed  nianufacture,  this  rise  will  be  quickly  cor- 
recteil  by  the  facilities  available  for  increased  production, 
while  in  raw  vegetable  products  the  correction  will  take  place 
more  slowly,  and  in  raw  animal  products  more  slowly  still.* 


■.i       '  •' 


'  Tlic  foUowinp  pnssnRC  occurs  in  the  "History  of  Prices,"  vol.  vi.,  p.  170: 
"The  proiiiis  of  ('(minioiiities  wiiicli  exiilhit  tlie  most  iinportnnt  iiistiinccs  of  a 
rise  of  price  arc  tlie  raw  niatcriais  most  extensively  used  Iti  ninniifactiires,  and 
the  production  of  which  does  not  admit  of  rapid  extension ;  and,  second,  the 


fi^  ■!  |: 


fit 


THE  NEW  GOLD. 


249 


But,  thirdly,  I  said  that  the  progress  of  prices  under  the 
influence  of  tlio  gold  supplies  would  be  governed  by  the  facil- 
ity with  which  supply  can  be  contracted.  Every  one  who  has 
practical  experience  of  manufacturing  operations  is  aware 
that,  when  capital  has  once  been  embarked  in  any  branch  of 
production,  it  cannot  at  once  be  removed  to  a  different  one 
tlio  moment  the  needs  of  society  may  rc(iuire  a  change  ; 
whence  it  happens  that,  on  any  sudden  change  taking  j)lace 
in  the  direction  of  a  nation's  expenditure,  or  when  from  mis- 
calculation production  lias  been  extended  beyond  existing 
wants,  producers  frequently  choose  to  continue  their  business 
at  diminished  jjrofits  or  even  at  a  positive  loss,  rather  than 
incur  still  greater  damage  by  suffering  their  capital  to  lie  idle, 
or  by  attempting  to  transfer  it  suddenly  into  some  new  branch 
of  production.  The  supply  of  a  commodity  is  not  therefore 
always,  or  generally,  at  once  contracted  on  the  demand  for  it 
falling  off,  or  on  its  production  becoming  less  profitable,  and, 
where  this  is  so,  it  is  evident  that  prices  must  at  times 
continue  depressed  below  the  normal  level ;  the  duration  of 
the  depression  depending  on  the  length  of  time  required  to 
effect  a  transference  of  the  unproductive  capital  to  some  more 
lucrative  investment.  Now,  the  difficulty  of  accomplishing 
this  will  generally  be  in  direct  proporti(m  to  the  amount  of 

groups  of  enmnioditics  in  wliit.-li  there  is  little,  if  any,  rise  of  iirice  in  18')7,  as 
eotniiiireil  with  1S.')1,  are  nrtieles  of  eoioninl  and  fro])iciil  produce,  the  supply 
of  whicli,  drawn  from  a  variety  of  sources,  does  admit  of  heinsj  eonsiilerabiy 
and  e.xpe<litiousiy  enhirjjed."  The /(/c<  of  tiie  rise  of  price  in  raw  niaterlals  is 
liLTe  admitted,  thougli,  in  ascribing  tliat  rise,  as  l)y  implication  the  passage 
does,  to  the  paucity  of  the  sources  of  supply,  tlie  explanation  is,  as  I  conceive, 
erroneous.  The  sources,  for  example,  from  which  tea  and  sui^ar  are  drawn  are 
not  more  various  than,  nor  indcd  >;>  various  as,  thosefrom  which  beef  and  tnut- 
ton,  butter  and  provisions,  tinii)cr,  t.illow,  and  leather  are  drawn;  yet  all  these 
latter  articles  have  very  eonsiilerably  advanced  in  price.  Afjain,  among 
colonial  and  tropical  produce  Mr.  Newmarch  includes  rum  and  tobacco,  anil  he 
mivjht  also  have  included  cotton;  yet  these  articles,  thouch  falling  within  the 
class  which  he  says  admits  of  being  expeditiously  enlarged,  and  which,  there- 
fore, according  to  bis  theory,  sliould  ttol  have  risen  in  price,  have  in  flirt  risen  in 
a  very  marked  manner.  It  api)ears  to  me  that  these  phenomena  can  only  be 
imderstood  by  reference  to  the  principle  which  I  have  endeavori'd  to  explain 
further  on  —  namely,  the  eflicacy  of  the  currency  of  different  countries  in 
determining  local  prices. 


w 

k 


I'. 


260 


ECONOMIC  HISTORY. 


fixed  capital  employed  ;  and  the  principal  form  in  which  fixed 
capital  exists  is  that  of  machinery.  It  is,  therefore,  in  articles 
in  the  production  of  which  machinery  is  extensively  employed 
—  that  is  to  say,  in  the  more  highly  finished  manufactures  — 
that  the  contraction  of  supply  will  be  most  difficult ;  and  this, 
it  will  be  observed,  is  also  the  kind  of  commodities  for  extend- 
ing the  supply  of  which  the  facilities  are  greatest.  While, 
therefore,  manufactured  articles  can  never  be  very  long  in 
advance  of  the  general  movement  of  prices,  they  may,  of  all 
commodities,  be  the  longest  in  arrear  of  it. 

The  oj)eration  of  this  j)rineiplc  will  be  shown  chiefly  in  that 
class  of  articles  which  feels  the  efl'ect  of  the  new  gold  only 
through  its  indirect  action  —  that  is  to  say,  through  its  action 
upon  wages.  With  respect  to  such  article  there  is  no  exten- 
sion of  demand,  and  the  price  consequently  can  only  be  raised 
through  a  C(mtrac(ion  of  sujiply.  It  is  evident  that  of  all 
commodities  this  is  the  class  in  which  the  rise  of  price  must 
proceed  most  slowly. 

From  tlic  foregoing  considerations,  then,  I  arrive  at  the  fol- 
lowing general  conclusions : — 

First.  —  That  the  commodities  the  price  of  which  maybe 
expected  first  to  rise  under  the  infkience  of  the  new  money  are 
those  which  fall  most  extensively  within  the  consumption  of 
the  productive  classes,  but  more  ])articidar]y  within  the  con- 
sumption of  the  laboring  and  artisan  section  of  these. 

Sfcomi/i/.  —  Tliat  of  such  commodities,  that  portion  which 
consists  of  finished  manufactures,  though  their  price  may  in 
the  first  instance  be  rapidly  raised,  cannot  continue  long  in 
advance  of  the  general  movement,  owing  to  the  facilities 
available  for  n'pidly  extending  the  supplv  ;  whereas,  should 
the  production,  i'rom  over-estimation  of  tlie  increasing  reipiire- 
ments,  bo  once  carried  to  excess,  their  prices,  in  consecjuence 
of  the  difficulty  of  contracting  supply,  may  be  kept  for  some 
considerable  time  below  the  normal  level. 

T/iin/l//. — That  such  raw  pnuhu-ts  as  fall  within  the  con- 
sumption of  the  classes  i,;  licated,  not  being  susceptible  of  the 
same  rapid  extension  as  K.inufactures,  may  continue  for  some 
time  in  advance  of  the  general  movement,  and  that,  among  raw 


t*r 


THE  NEW  GOLD. 


251 


Itrmlucts,  the  effects  will  be  more  marked  in  those  derived  from 
the  animal  than  in  those  derived  from  the  vegetable  kingdom. 

Fourthly.  —  That  the  commodities  last  to  feel  the  effects  of 
the  new  money,  and  which  may  be  expected  to  rise  most 
slowly  under  its  influence,  are  those  articles  of  linished  manu- 
facture which  do  not  happen  to  fall  within  the  range  of  the 
new  expenditure;  such  articles  being  affected  only  by  its 
indirect  action,  and  this  action  being  in  their  case  obstructed 
by  impediments  to  the  contraction  of  supply. 

This  is  one  class  of  laws  by  which  1  conceive  the  ascending 
movement  in  prices  will  be  governed  ;  and  up  to  this  point  1 
have  the  satisfaction  of  finding  my  conclusions  very  fully 
corroborated  by  the  independent  investigations  of  a  French 
economist,  M.  Levasseur,  who,  in  some  articles  lately  con- 
tril)utod  by  him  to  the  Journal  ileif  A'conoinistes,  has,  by  an 
entirely  different  line  of  investigation  from  that  which  I  have 
followed, —  namely,  by  generalizing  on  the  statistics  of  prices 
in  Fniucc  during  the  period  of  1847  to  185G,  —  arrived  at 
conclusions  in  the  main  points  identical  with  those  which  1 
have  now  advanced.* 

There  is,  however,  another  principle  to  which  I  venture  to 
call  attention,  which  has  not,  so  far  as  I  know,  been  noticed 
by  any  of  the  economists  who  have  treated  this  (luestion,  but 
wliich.  It  appears  to  i.ve,  must  exercise  a  po>verful  infhience  on 
the  course  of  the  movement.  Tlie  principle  to  which  I  refer 
is  that  elVicacy  which  resides  in  the  currency  of  each  country, 
into  wliich  any  portion  of  tiie  new  money  may  be  received, 
for  (b'tcruiining  the  effect  of  this  infusion  on  the  range  of 
local  i)rici'S. 

It  is  evident  that  the  quantity  of  metallic  money  necessary 
to  support  any  required  advaiu-e  of  prices  throughout  a  given 
range  of  business  will  vary  with  tlie  character  of  the  currency 
into  which  it  is  received;  that  the  (iiinntity  recpiired  will  1)0 
greater  in  proportion  as  the  metallic  clement  of  the  currency 
is  greater;  and,  on  the  other  hand,  less  in  proportion  as  the 
credit  element   prevails.      If  the  cuireney   of   a  country  be 

'  Si'o  r'liiriipg,  Appciulix,  p  oOO,  for  a  suminnry  of  M.  Levnsseiir's  con- 
clusions. 


P"m 


!|r 


4 

i  > 


M 


!M 


252 


ECONOMIC  HISTORY. 


jmrcly  metallic,  a  given  addition  of  coin  will  increase  the  ag- 
gregate niedimu  of  exchange  in  that  country  only  by  the  same 
amount;  if,  on  the  other  hand,  the  currency  consists  largely 
of  credit  contrivances,  each  addition  to  its  coin  becomes  the 
basis  of  a  new  superstructure  of  credit  in  the  form  of  bank- 
notes and  credits,  bills  of  exchange,  checks,  etc.,  and  the  ag- 
gregate circulation  is  increased,  not  simply  by  the  amount  of 
the  added  coin,  but  by  the  extent  of  the  new  fabric  of  credit 
of  which  this  coin  is  made  the  foundation.  Applying  this 
princi[)le  to  the  dilTerent  countries  of  the  world,  it  follows  that 
a  given  addition  to  the  metallic  stock  of  Great  Britain  or  the 
I'nited  States,  in  whose  monetary  systems  credit  is  very  cfli- 
eaciou8,  will  cause  a  greater  cx[>ansion  of  the  total  circulation, 
and  therefore  will  support  a  greater  advance  in  general  prices, 
than  the  same  addition  to  the  currency  of  countries  like  Franco, 
in  which  credit  is  less  active ;  and  that,  again,  the  effect  in 
countries  like  France  will  be  greater  than  in  countries  like 
India  or  China,  in  whieh  the  currencies  are  almost  purely 
metallic,  and  where  credit  is  comparatively  little  used. 

Now,  this  being  so,  if  we  consider  further  that  the  coun- 
tries wliich  receive  in  the  first  instance  the  largest  share  of 
the  new  money  —  namely,  England  and  the  United  States  — 
are  also  those  in  whieh,  from  the  character  of  their  curren- 
cies, a  given  amount  of  coin  will  produce  the  greatest  effect; 
and,  on  the  other  hand,  that  Asiatic  communities,  in  which, 
from  the  weakness  of  the  eredit  element,  the  currencies  are 
least  expansible,  receive  but  a  small  portion  of  their  share  of 
the  new  money  direct  from  the  gold  countries;^  being  com- 

'  I  From  sfiitistics  roocntly  fiirnislicd  by  the  Economist,  I  learn  that  the  facts 
liavp  not  l)fi'ri  as  I  licre  assiiincMl,  at  loast  since  1858  (the  date  from  wliich  full 
returns  of  specie  imports  have  been  published  by  the  Board  of  Trade) ;  and  it  Is 
jirobalile  1  was  mistaken  in  my  supposition  with  re(;ard  to  v/hat  had  occurred 
before  that  time.  Since  18')8,  of  .C'.lO.(M>(>,000  of  gold  received  and  retained  by 
ludia  ami  the  Kast,  some  .£10,000,000,  more  than  a  half  of  tlie  whole,  appear 
to  have  fj""e  there  divecllij  from  Australia,  the  remainder  only  having  come 
throusili  Kurope.  This  error  as  to  matter  of  fact  will,  no  doubt,  affect  to  some 
extent  the  conclusion  contended  for.  The  causes  tending  to  a  divergence  of 
European  from  Asiatic  prices  have  not  been,  it  seems,  as  powerful  as  I  had 
supposed;  and,  in  point  of  fact,  this  feature  in  tlio  movement  has  been  liss 
marked  than  I  skelched  it ,  b\it  for  this,  other  causes  besiiles  that  noticed  here 
liave  been  responsible  (1872).     See  Introductory  Chapter,  p.  12.) 


^il.M't  i 


fir 


THE  NEW  GOLD. 


253 


polled  to  wait  for  the  remainder  till  it  has  flowed  throiif?h  the 
principal  markets  of  Euroi)e  and  America,  allccting  prices  in 
its  transit,  —  if,  I  say,  we  consider  these  facts  in  connection 
with  the  principle  to  which  I  have  adverted,  I  think  we  nuist 
recognize  in  that  principle  —  in  the  influence  of  the  currency 
of  each  country  on  the  range  of  its  local  prices  —  an  agency 
which  must  modify  in  no  small  degree  the  general  character 
of  the  movement  which  is  now  in  progress. 

In  spea,king  of  the  influence  of  the  currency  of  a  country  on 
the  range  of  its  local  jtrices,  I  should  explain  that  I  use  the 
words  "local  prices"  in  a  somewhat  restricted  sense;  namely, 
with  reference  to  the  locality  in  which  commodities  are  jn'o- 
iluced,  not  to  that  in  which  they  are  sold,  their  price  in  the 
latter  i)lace  being  always  determined  by  their  price  in  the 
former.  Thus,  when  I  speak  of  Australian,  English,  or  In- 
dian prices,  I  shall  be  understood  to  mean  the  prices  of  their 
several  products  in  Australia,  England,  or  India. 

Understanding  the  words,  then,  in  this  sense,  let  us  sec 
how  far  local  prices  are  likely  to  be  affected  by  the  cause  to 
which  I  have  adverted. 

In  the  first  i)lace,  then,  let  it  be  observed  that  a  very  re- 
markable divergence  of  local  prices  from  the  range  previously 
obtaining  in  the  international  scale  has  already  taken  place. ^ 
The  prices  of  all  articles  produced  in  Australia  and  California 
are  at  present  on  an  average  from  two  to  three  times  higher 
than  those  which  prevailed  previous  to  the  gold  discoveries; 
these  rates  have  now  been  maintained  for  several  years,  and 
arc  likely  to  continue ;  but,  while  this  advance  has  taken  place 
in  the  gold  countries,  in  no  part  of  the  world  external  to  those 
regions  have  prices  advanced  by  so  mueb  as  one  third.  Tb(^ 
possibility  of  a  divergence  of  local  prices  is  thus,  as  a  matter 
of  fact,  established  ;  and  the  explanation  of  the  jihenomenon 
I  take  to  be  this.  The  sudden  cheapening  of  gold  in  Australia 
and  California  quickly  led,  through  the  action  of  comi)etition 
among  the  diflfercnt  departments  of  industry,  to  a  corre- 
sponding advance  in  the  jirices  of  everything  produced  in 
those  countries ;  this  advance  being  in  their  case  possible,  be- 

1  See  Cairnes,  pp.  24,  25. 


hi', 


M'J 


^   i 

11 


•254 


ECONOMIC  HISTORY. 


^ 


m 


it 


iii\ 


^ 


u 


cause,  from  (lie  limited  extent  of  the  transactions,  the  local 
circulation  was  quickly  raised  to  the  point  sullicient  to  sustain 
a  doulile  or  triple  elevation  ;  but  it  was  inipossiljle  that  the 
currencies  of  all  countries  should  he  expanded  in  the  same 
proportions  in  the  same  time;  and,  constMiuently,  prices  in 
other  countries  have  not  risen  with  the  same  rapidity.  The 
cause,  therefore,  of  this  divergence  of  local  prices  —  the  cir- 
cumstance which  k(!eps  general  prices  in  arrear  of  that  ele- 
vation which  they  have  attained  in  Australia  and  California  — 
is  the  diHiciilty  of  expanding  the  currencies  of  the  world  to 
those  dimcjisions  which  such  an  advance  would  rccpiirc.  This 
expansion,  however,  is  being  gradually  effected  by  the  process 
we  are  now  witnessing,  —  the  increased  production  of  tlic  pre- 
cious metals,  and  their  dilTusion  throughout  the  world.  Hut, 
as  I  have  said,  (he  diffusion  is  not  uniform  over  the  various 
currencies,  nor  are  the  currencies  receiving  the  new  supplies 
of  uniform  8uscep(il)ility ;  and  the  inequalities  arc  such  as  to 
aggravate  each  other;  the  currencies  which  arc  (he  most  sen- 
sitive to  an  increase  of  the  pi'ccious  metals  receiving  in  the 
first  instance  nearly  the  whole  of  the  new  gold;  while  (he 
least  sensidvc  currencies  are  (ho  last  to  receive  their  share. 
And  these,  it  appears  to  me,  are  grounds  for  expecting  among 
other  countries  further  exami)l('s  of  tliat  jthoiiomenon  of  local 
divergence,  of  which  one  has  already  been  alTorded  by  the  gold 
countries. 

To  judge,  liowcver,  of  the  extent  to  which  such  local  vari- 
ations of  price  can  bo  carried,  we  must  advert  to  the  corrective 
influences  which  the  play  of  international  dealings  calls  into 
action;  and  these  api)ear  to  me  to  resolve  themselves  into  the 
two  following:  namely,  first,  (he  corrective,  which  is  supplied 
Ity  the  competition  of  dilTcrcnt  nations,  producers  of  the  same 
commodities,  in  neutral  markets;  and  secondly,  that  which 
exists  in  (he  recijirocal  demand  of  the  different  commercial 
countries  for  each  other's  productions. 

The  first  f«)rm  of  the  corrective  is  obviously  the  most  pow- 
erful, and  must,  so  far  as  its  oj)cration  extends,  at  once  im- 
pose a  check  upon  any  serious  divergence.  Thus  it  is  evident 
that  prices  in  England  and  the  United  States  could  not  pro- 


THE  NEW  GOLD. 


255 


into 
the 
iliod 
lame 
lileh 
I'cial 

|)0W- 

im- 
Icnt 
liro- 


ceed  very  much  in  advance  of  prices  on  the  continent  of  Europe, 
since  the  certain  elYect  of  such  an  occurrence  would  be  to  send 
consumers  from  the  dearer  to  tlic  cheaper  markets,  and  tlius 
to  divert  the  tide  of  gold  from  the  currencies  of  England  and 
America  to  the  currencies  of  France,  Germany,  and  other  con- 
tinental States, —  a  process  which  would  bo  continued  until 
prices  were  restored  to  nearly  the  same  relative  level  as  before. 
But  it  is  only  among  nations  which  arc  competitors  in  the 
same  description  of  commodities  that  this  equalizing  process 
comes  into  operation.  As  between  countries  like  England  and 
America  on  the  one  hand,  and  India  and  China  on  the  other, 
—  in  which  the  climate,  soil,  and  general  physical  conditions 
dilTer  widely,  in  which,  conseiiuently,  the  staple  industries  aro 
different,  and  whose  productions  do  not,  therefore,  come  into 
competition  in  the  markets  of  the  world,  —  this  corrective  in- 
fluence would  be  felt  slightly  or  not  at  all.  The  only  check 
which  could  be  counted  on  in  this  case  would  be  that  far 
weaker  one  which  is  furnished  by  the  action  of  reciprocal  de- 
mand in  international  dealings.  Thus,  supposing  prices  to 
rise  more  rapidly  in  England  than  in  India,  this  must  lead,  on 
the  one  hand,  to  an  increased  expenditure  in  England  on  In- 
dian c(mimodities,  and,  on  the  other,  to  a  diminished  expendi- 
ture in  India  on  English  commodities,  with  this  result,  —  a 
steady  elllux  of  the  precious  metals  from  the  former  to  the 
latter  country.  Such  an  elllux,  as  commercial  men  are  well 
aware,  has  long  been  a  normal  phenomenon  in  our  Eastern 
trade,  but  it  has  lately  assumed  dimensions  which  constitute 
it  a  new  fact  needing  a  special  explanation.  I  believe  that 
explanation  is  to  be  found  in  the  circumstances  to  which  I  am 
calling  attention. 

English  and  American  prices,  and  with  thorn  money  incomes 
in  England  and  America,  have,  under  the  action  of  the  new 
gold,  been  advancing  more  rapidly  than  prices  and  incomes  in 
Oriental  countries ;  and  the  result  has  been  a  change  in  the 
relative  indebtedness  of  those  two  parts  of  the  world,  leading 
to  a  transfer  to  the  creditor  country  of  corresponding  amounts 
of  that  material  which  forms  the  universal  equivalent  of  com- 
merce.    It  is  true,  indeed,  that  other  causes  have  also  contrib- 


1% 

i-'  t 
t'V 


I 


\t.  I 


I'll 


iU 


I 


256 


ECONOMIC  II f STORY. 


utcd  tolliis  result,  ami  in  particular  I  may  mention  tlio  failure 
of  the  silk  crop  in  Europe,  which  has  larj^cly  thrown  us  upon 
China,  as  a  means  of  suitplomenting  our  delicient  sup|)lies. 
But  the  main  cause  of  the  i)henomenon  in  its  present  propor- 
tions is,  1  conceive,  to  be  found,  not  in  any  such  mere  tempo- 
rary disturbances,  but  in  the  natural  overllowiujr  (eonse(iuent 
uj)on  the  increase  of  the  precious  metals)  of  the  redundant 
currencies  of  Europe  and  America  into  the  more  absorbent 
and  im,)assive  systems  of  Asia.*  This,  then,  I  say,  is  the  only 
substantial  corrective  alforded  to  the  advance  of  prices  in 
Europe  and  America  beyond  their  former  and  normal  level  in 
relation  to  prices  in  the  East ;  and  the  cpiestion  is,  will  this 
corrective  be  sullicient  to  neutralize  the  tendency  to  a  diver- 
f^ence  ?  Will  tlie  flow  of  the  precious  metals  fr(jm  West  to 
East  sullice  to  keep  prices  in  England  and  America  within  the 
range  prescril)ed  by  the  inelastic  metallic  systems  of  Asia?  I 
do  not  conceive  that  the  corrective  will  be  adequate  to  this 
end,  and  I  rest  this  conclusion  upon  the  facts  and  jirinciples 
which  I  have  stated,  —  the  vast  proportion  of  the  whole  gold 
production  which  finds  its  way  in  the  first  instance  into  the 
markets  of  England  and  America,  the  comparatively  small 
)»ortion  which  goes  direct  to  the  markets  of  Asia,^  the  highly 
elastic  and  expansible  currencies  of  the  former  countries,  and 
the  extremely  impassive  and  inexpansiblc  currencies  of  the 
latter. 

W»^  find,  therefore,  two  sets  of  laws  by  which  the  progress 
of  prices,  or  (which  comes  to  the  same  thing)  the  deprecia- 

'  Accnrilinply  we  find  that  tlie  drain  wliicli,  duriiiK  tlic  rovulsiori  of  trade 
following  on  tlio  conunorcial  crisis  of  1X57,  had  for  a  wiiile  wusi-d,  has  witii 
the  revival  of  trado,  recommenced.  As  a  proof  iiow  liitte  mere  practical  sagacity 
is  to  bo  trusted  in  a  questi(in  of  this  kind,  it  may  l)c  wortii  wliile  to  mention  that, 
only  three  montlis  since,  mercantile  writers  were  confidently  jiredictiMg  llie  turn- 
ill;/  of  the  tide  of  silver  from  the  F.ast  to  F.nijland.  The  foUowintJ  is  from  a  circu- 
lar of  Messrs.  Kllisen  &  Co.,  quoted  in  the  Times  City  article,  .Inly  28,  18o8, 
apparently  with  the  editor's  approval:  "The  time  is  rapidly  ai)proacliing  when 
silver  will  also  be  shipped  from  here  [China]  to  ICnslanil."  So  far  from  this 
being  the  case,  the  drain  to  the  Kast  has  again  set  in,  and  (jives  every  indica- 
tion of  assuming  its  former  dimensions.  Every  mail  to  India  during  the  pres- 
ent month  (November,  1858)  has  taken  out  large  amounts  of  silver. 

3  See  ante,  p.  252,  note. 


THE  NEW  GOLD. 


257 


tion  of  ^old  uiulor  the  action  of  nn  iiicrenscd  supply,  is  rejjfu- 
lafcil :  lir.st,  tliosc  wliich  I  cxplaiiuMl  in  the  earlier  portion  of 
this  paper,  which  depend  chiefly  on  the  facility  with  which 
the  supply  of  commodities  can  he  adjusted  to  such  chanj^es  in 
demand  as  the  new  money  expenditure  nuiy  oecasion ;  and, 
secondly,  those  which  result  from  the  action  of  the  new  money 
on  the  currencies  into  which  it  is  received.  According  to  the 
former  principle,  the  rise  in  price  follows  tlie  nature  of  the 
commodity  affected ;  thus  it  will  in  general  be  greater  in  ani- 
mid  than  in  vegetable  productions  —  in  raw  produce  than  in 
(inished  manufactures.  According  to  the  latter  prineiplcj  the 
advance  follows  the  economic  conditions  of  the  locality  in 
which  the  commodity  is  produced.  Thus  the  rise  in  price  has 
been  most  rapid  in  commodities  produced  in  the  gold  coun- 
tries ;  having  in  these  at  a  single  bound  reached  its  utmost 
limit, — -the  limit  set  by  the  cost  of  procm-ing  gold.  After 
commodities  produced  in  the  gold  regions,  the  advance  1  con- 
ceive will  proceed  most  rapidly  in  the  productions  of  England 
and  the  United  States ;  after  these,  at  no  great  interval,  in 
the  productions  of  the  continent  of  Ei  ro|)e ;  while  the  com- 
modities the  last  to  feel  the  effects  of  the  new  money,  and 
which  will  advance  most  slowly  under  its  influence,  are  the 
productions  of  India  and  China,  and,  I  may  add,  of  tropical 
countries  generally,  so  far  as  these  share,  as  regards  their 
economic  conditions,  the  general  character  of  the  former 
countries. 

Such  appear  to  bo  the  general  principles  according  to  which 
a  depreciation  of  the  precious  metals,  under  the  action  of  an 
increased  supply,  tends  to  establish  itself.  With  a  view  to 
ascertain  how  far,  in  the  progress  of  prices  up  to  the  present 
time  (1858),  any  trace  of  their  operation  can  be  discerned,  T 
have  drawn  up  some  statistical  tables ;  i  and  although,  from 
the  imperfect  nature  of  the  materials  which  1  have  been  able 
to  collect,  I  cannot  claim  for  the  result  a  complete  verification 
of  the  theoretic  conclusions  which  I  have  ventured  to  ad- 
vance, I  think  they  are  such  as  to  justify  me  in  placing  some 
confidence  in  the  general  soundness  of  those  views.     Before, 

^  See  Cairnes,  Appendix. 
17 


V\ 


If:  I 


\l 


"I! 


'<V. 


'Mi 


^•m 


mm 


It!  ' 


*    n 


2.J8 


ECONOMIC  HISTORY. 


however,  stntinp;  the  roaiilts  of  the  tables,  two  or  three  re- 
marks iniist   \n\  premised. 

First,  1  woultl  cruvo  ntteiitioii  to  this  fact,  that  the  present 
time  [1S*)8J  is  one  sin^nihirly  free  from  liistiirliinj;  inthienees, 
and  that  such  as  do  exist  arc  of  a  kind  rather  to  conceal  than 
oxaj^j^'crato  the  elTects  of  (h'preciation.  Thus,  we  have  had 
three  harvests  in  succession  of,  I  believe,  more  than  averap* 
productiveness  (tiio  last  year  of  deficiency  bcinj^  185;'));  and 
this  cause  of  abundance  has  been  assisted  l)y  free-trade,  whicli 
has  opened  our  ports  to  the  produce  of  all  (piarters  of  the 
world.  Aj^aiii,  althoujrii  in  the  jteriod  under  leview  we  have 
passed  thr(»u<^h  a  Kuropean  war,  yet  we  have  now  enjoyed  two 
years  and  a  half  of  peace,  during  wliicb,  I  think,  tlu?  economic 
intluonces  of  the  war  may  be  taken  to  hnve  exlmustcd  them- 
selves. It  is  true,  Imieed,  that  we  liavo  an  Indian  i(>volt  still 
on  our  hands,  Ix^sidcs  havintr  but  just  concluded  some  hostile 
operations  in  China.  I»ut  these  disturl»iinccs  have  not  ijcen 
of  a  kind  to  interferes  seriously  with  the  ^^(.ik.i'jiI  course  of 
trade,  except  in  some  few  Oriental  commodities  in  which  their 
elTeets  are  slightly  apparent. 

Ihit  what  renders  the  present  time  pecidiarly  important  as 
a  point  of  comparison  with  former  periods,  is  its  being  in  im- 
mediate aeipuMice  to  a  .severe  commercial  crisis.  The  elTect 
of  the  crisis  of  last  winter  has  been  elTectually  to  eliminate 
one  great  disturbing  element  from  those  causes  to  which  a 
rise  of  price  might  l)e  attriliutcd,  —  the  element  of  credit. 
Trade  is  now  sulTering  d(>pression  in  almost  all  its  braiu-hes  ; 
and  prices,  after  a  period  of  undue  inllation,  have,  through  an 
ordeal  of  bankruptcy,  been  brought  to  the  test  of  real  value. 
In  till!  tluctiiations  of  commerce  we  have  reached  the  lowest 
point  of  the  wave;  whatever,  therefore,  be  the  range  of  prices 
at  the  present  time,  we  may  at  least  be  sure  that  no  commer- 
cial convulsion  is  likely  to  lower  it. 

We  have  further  to  remember  that  in  an  ngc  like  the  pres- 
ent, in  which  science  and  its  applications  to  the  arts  arc  in  all 
civilized  cou!itries  making  rapid  strides,  there  exists  in  most 
articles  of  general  consumption  (but  more  particularly  in  the 
more  linishcd  manufactures)  a  constant  tendency  to  a  decline 


THE  NEW  GOLD. 


259 


I 


1 


of  prico,  tliroii<,'li  the  employincnt,  of  more  cfTiciont  mncliinery 
mill  iiuprovt'd  procoHHUH  of  production.  Now,  tiikinj?  all  these 
circiimstaiiccrt  tojictluT, —  (1h!  propitioiisuosH  of  the  HeiiHons, 
the  action  of  fri'i'-lnidc,  lln.'  ahscnt'c  of  war,  th(!  contraction  of 
credit,  and  tlic  general  tendency  to  a  reduction  of  cost  pro- 
cectlini;  from  the  proj^rcss  of  knowledtrc,  —  it  appears  to  n»e 
that,  were  then;  no  other  cause  in  operation,  we  should  have 
reason  to  look  for  a  very  considerable  fall  of  prices  nt  the 
])i'es(Mit  lime,  as   compared  with,  say,  ei|iht  or  ten  years  aj:fo. 


1 


the  f( 


tabli 


not 


es  '  w  ill  show,  have 
fallen;  they  have,  on  the  contrary,  very  decidedly  risen,  and 
the  advance  has,  moreover,  as  the  same  tables  will  also  show, 
on  llie  whole  proceeded  in  conformity  with  the  principles 
which  I  have  in  this  paper  endeavored  to  establish.  And  this 
is  my  <j:round  for  asserliii}:;  that  Ihe  deprccialion  of  our  .stan- 
dard money  is  already,  under  the  action  of  the  new  gold,  an 
accomplished  fact. 


im- 

Tect 

nale 
ich  a 
red  it. 

hcs  ; 
h  an 

alue. 
owest 

iriccs 
iimer- 

pros- 
in  all 
inost 
in  the 
cclinc 


ESSAY  III.  — TNTERN'ATIONAL   HESITLTSU 

In  a  former  essay  ''  it  was  attempted,  from  a  review  of  the 
industrial  history  of  Australia  since  the  late  discovery  of  <rold, 
to  make  some  irencral  deductions  rospectinu:  the  character 
of  that  event,  and  of  its  iiilluence  upon  national  interests. 
Anions?  other  conclusions  it  was  maintained  that  the;  ti-ndoncy 
of  the  }?oI(l  discoveries,  or,  to  spoak  with  mon.'  precision,  the 
ten<lency  of  the  increased  production  of  pold,  was  rather  to 
alter  the  distribution  of  real  weallh  in  the  w<»rlil  than  to 
increase  its  amount  ;  Ihe  beiiefil  derived  by  some  countries 
and  classes  from  the  event  beimr  for  the  most  part  obtained  at 
the  expense  of  others.  It  was  shown,  for  example,  that  the 
frain  to  Australia  ami  California  from  their  irold  pKilds  accrued 
to  them  exclusively  Ihrouirh  their  foreiirn  trade,  —  their  cheap 
gold  enalilint?  them  to  commainl  on  easier  Icnns  than  for- 
merly all  foreiirn  productions;  while,  on  the  other  hand,  the 
only  result  to  foreign  nations  of  the  trallic  thence  arising  was 


'i 


•  See  Cairnps,  Apiiemlioca. 
'  V.asay  I.  u(  this  scrii'S. 


'^  Fraser's  Magazine,  January,  1800. 


■:<l 


'til 


hi 


«, '  >u 


',?  1 


260 


E  CONOMIC  HIS  roll  Y. 


an  incrcfisc  in  tlicir  stociv  of  money,  —  a  result  rendered  nec- 
cssiU")  indocd  l)y  (ho  new  conditions  of  raisinj^  p;old  introduced 
by  the  frold  discoveries,  hut  in  itself  destitute  of  any  real 
utility.  It  was  shown,  in  short,  that,  as  regards  commercial 
nations,  the  elYect  of  the  gold  discoveries  was  to  place  tlu-ui 
untier  the  necessity  of  enlarging  their  currencies,  compelling 
them  to  pay  for  the  rciiuisite  increase  by  an  increased  expoit 
of  their  productions. 

'i'o  this  conclusion  I  was  led  by  direct  inference  from  the 
facts  presented  in  the  gold  countries.  In  the  present  jjaper  it 
is  j»roposed  to  follow  up  the  inquiry,  with  a  view  to  a  mo'" 
particular  ascertaimncut  of  tlie  consefpieiu:es  fornuM'ly  de- 
Hcrilied  ;  the  olijcct  hciing  to  discover  in  w',at  maimer  the  los.^ 
arising  from  the  gold  movement  is  likely  to  l)e  distributed 
anuuig  conunercial  nations,  and  how  far  this  loss  may  in  jiar- 
licular  cases  be  neutralized  or  compensated  by  other  iulluonces 
which  the  same  movement  may  develop. 

In  the  discussions  whi*  h  have  hillu'rto  taken  place  upon 
this  (piesti(»n,  the  ini|uiry  into  the  ('onsc(|iieuces  of  the  gold 
discoveries  has  been  couliucd  almost  exclusively  to  that  as- 
pect of  ihe  event  ill  which  it  is  regai'dcd  as  alVecting  fixed 
(•i)ntracts  through  a  (le|>rcciation  of  the  moiu'tary  stamlard.* 
As  soon  as  the  probaliility  of  depreciation  is  settled,  and  the 
elTi'cfs  of  this  upon  the  dilTcrent  classes  of  society,  accoi'ding 
as  they  happen  to  In-  dclitois  ov  creditors  under  fixed  con- 
tracts, explainetl,  the  suliji'ct  for  the  most  part  is  considered 
as  exhausted.  I  venture,  however,  to  think  that  this  uiikU' 
of  treatment  is  vcrv  far  from  exhausting  the  (|uestion.  It 
seems  to  inc  that,  iuibpi'iulently  altogether  of  the  existence 
of  lixcil  contrai'ts,  indcpendtMitly  even  of  gold  lieing  a  stand- 
ard of  value,  (he  increasc(l  piMductinn  of  this  metal  which  is 
now  (akinir  place  will  be  attended,  inileed  has  already  bet  n 

'  Si'o  Stirliiiti's  "  GoM  Diacnvorios  nml  tlicir  prf)l>i>lili>  Conscqupncra ; " 
riicvuliiT  "<)ii  tlic  I'rolmlilf  K.ill  in  tlic  Viiliic  of  (loM;"  I.cvmsscw  s  cimtrilni- 
tinlis  lo  llic  ".Fiilirnal  ilrs  llidlloMli^tis,"  IS.'iH;  >!'(  "ullocli's  jirl.ilc  "  I'lii'ioi'.S 
Mi'tnl«,"  in  tlic  "  I'.iic.vcliipii'diii  Hritiiniiica  "  In  nil  tlii'«c,  iinil  in  nmny  otIiiT 
ininnr  pniiiuctions  on  tlio  dninc  ("iilijcci,  nliiifist  tlir  on! y  t'i>nst'(im'nci's  of  tlio 
Kolcl  iliscDvcrics  wli.cli  arc  taken  aii'u'ii't  of  arc  tlio.su  whicli  occur  in  tixetl 
cjiitnictii  tliroiigli  a  tlciirccimioii  of  the  stnmliinl. 


THE  NEW  GOLD. 


261 


IS  ; " 
•il.ii- 

|i()i:8 

Itlicr 

til.' 


.al tended,  with  very  important  results.  Let  us  observe  for 
a  nioment  tlic  movement  which  is  now  in  progress.  Austra- 
lia and  California  have,  during  the  last  eight  or  ten  years, 
sent  into  general  circulation  some  two  hundred  millions 
sterling  of  gold.  Of  this  vast  sum  portions  have  penetrated 
to  the  most  remote  (juarters  of  the  world ;  hut  the  bulk  of 
it  has  been  received  into  the  currencies  of  Europe  and  the 
United  States  from  which  it  has  largely  displaced  the  silver 
formerly  circulating;  the  latter  metal,  as  it  has  become  free, 
flowing  off  into  Asia,  where  it  is  permanently  absorbed. 
ViewiTig  the  effect  as  it  occurs  in  the  mass  of  the  two  metals 
combined,  it  may  bo  said  that  the  stream  which  rises  in  the 
gold  regions  of  Australia  and  California  flows  through  the 
currencies  of  the  United  States  and  Europe,  and  after  saturat- 
ing the  trade  of  these  countries,  finally  loses  itself  in  the 
hoards  of  Chiiui  and  flindostan.  The  tide  which  comes  to 
light  in  the  sands  and  rocks  of  the  auriferous  regions  disap- 
pears in  the  accumulations  of  the  East.  In  conjunction, 
however,  with  this  movement,  there  has  been  a  counter  one. 
With  every  advance  in  the  metallic  tide  a  stream  of  com- 
modities has  set  in  in  the  opjjosite  direction  along  the  same 
course,  — a  stream  which,  issuing  from  the  ports  of  Europe, 
America,  and  Asia,  and  depositing  as  it  proceeds  a  i)orti()n 
of  the  wealth  with  which  it  is  charged,  finds  its  termination 
in  the  markets  of  the  gold  countries.  Here,  then,  we  find  a 
vast  disturbance  in  the  conditions  of  national  waUh, — a 
disturbance  originating  in  the  gold  discoveries,  and  result- 
ing in  a  transfer,  on  an  enormous  scale  of  consumable  goods 
—  the  means  of  well-being  —  from  oue  side  of  the  globe  to  the 
other.  This  disturbance,  it  is  evident,  is  entirely  independ- 
ent of  the  accident  that  gitld  happens  to  be  in  some  countries 
a  standard  of  value,  as  well  as  of  the  existence  of  fixed  monev- 
contracts;  for  it  includes  within  tiie  range  of  its  influence 
countries  in  which  gold  is  not,  no  less  than  those  in  which 
it  is,  the  mimetary  standard;  and  it  affects  alike  j)ers(ms 
whose  bargains  are  made  from  day  to  day,  and  those  Avho 
engage  in  contracts  extending  over  centuries.  The  fact  is, 
the  movement  in  question  is  the  result,  not  of  gold's  being  a 


:•.  iii 


m 


i.'l      w 


i' 


m 


4 


w 


i 


2G2 


ECONOMIC  iiisroii  y. 


stiiiulanl  of  valiio,  Imt  of  its  iK'iiijjf  a  SDiirco  of  jmrchasing 
power;  and  tlu>  inlliiciH'f  of  Ihc  tidld  discoveries  liavin;^  beci) 
lutlier<o  repirded  almost  exclusivtdy  with  refereiiee  lo  tlu! 
i'oi'iiier  function,  llie  vast  olTccts  wliicli  they  are  jtrodiieiiiji- 
throiifrh  the  action  of  the  lattiT,  — that  is  to  say,  l>y  ulteiiuix 
the  distril)Ution  of  piirchasini^  power  in  liie  worhl, — liavc! 
been  almost  wholly  overlooked.  It  has  indeed  heen  per- 
ceived that  a  u:reat  inlliix  of  the  jd'ecious  metals  is  takinuf 
place,  uccompanifd  with  certain  consciiiienecs  on  the  tradt; 
of  the  world;  hnt  so  far  as  1  know,  heyond  some  general 
phrases  respectiiiir  the  stimulus  {xiven  to  production  liy  an 
increase  of  money,  and  the  great  devcdopment  of  coinmerctj 
which  it  is  cansintr.  no  attempt  has  yet  Ix'cn  made  to  state 
the  principles  l>y  which  ihi'  niovemcut  is  L''o\crned,  or  the 
cITects  which  may  How  from  it.  It  is  to  these  (piestions, 
then,  that  1  would  now  solicit  the  reader's  attention,  ami 
towi'ids  their  solution  (he  f(dlowing  remarks  are  oflcrt  d 
as  a  cont ril)iit ion. 

'I'hose  who  have  followed  the  course  of  this  controversy  are 
aware  that,  hy  most  peisons  who  have  taken  i)art  in  it,  it  has 
liceii  assiime(l,  almost  as  an  axiom,  that  no  depreoiation  of 
gold  in  eonseipirnce  of  the  gold  discoveries  has,  up  to  the 
I  res(Mit  time,  taken  plae(>. '  As  a  matter  of  fact,  how(>ver, 
we  km  w  (h.!:  ilie  gold  prices  of  all  commodities  produ  'cd  in 
Austr:  lia  and  California  have  risen  in  at  least  a  twofeid  pro- 
portion:'- while  we  have  si-cn  that  (so  long  as  the  eoiiditions 
of  pioducimr  gold  remain  as  at  pi'csent)  liils  rise  mu-st  lie  per- 
manent. To  express  the  same  thing  dil't'icntly :  in  'he  pur- 
eha.sc  of  every  commodity  nnsed  in  the  gold  countries  tw(» 
sovereigns  are  now  retpiired,  and  (the  nhovo  conditions  being 
fiillilled)  will  continue  to  be  rcijuired,  wlu-re  one  was  formerly 


'  Till'  prii)i'iiml  oxcciilioiis  to  tliin  stntcnu'iit  lUf  M.  I.cviissi'iir  (wlm,  in  lui  nr- 
ticlf  in  tlie".Iniirnii!  iI'-h  Ivomiminti's,"  Mnrcli,  1H.',S,  cBtimnti's  the  rise  (if  pricis 
ill  I'Vaiu'c  siiii'i'  is|7  at  'J")  jut  iciit  on  all  coninKidiiin*),  ami  Dr.  Sncilpfcr,  of 
!i:iniliiiru,  who,  in  Imh  table  of  priccK  ;,'ivi'n  it)  Iii8  "  I'ontrihiitionH  to  thi'  Sliitis- 
tirs  of  I'rici's  ill  llalllhll^^,^"  arrivi's  at  a  Hiiniiar  result  (see  Appeii'lix).  .Many 
other  writers,  iinl.'eil,  iiel^iinwleiijje  that  prii'es  liave  ri.oii,  hut  the  rise  is  always 
atirihnlcd  to  caiiM's  ilihtiiiei  from  tliu  iiicreaiieil  pruductioii  of  gold. 

^  Suo  CuiriKit,  p.  '24 


i 


THE  NEW  GOLD. 


268 


suHicit-'iit ;  iuul  if  tliis  docs  not  amount  to  a  fall  in  the  value 
of  y;oltl,  1  must  C(jniV'.ss  mysclt'  unal)lt'  to  understand  \\w  nunin- 


tliosc  who  hav(>   written  on  this  (piestion;    it  seems  to 


ing  of  tliat  expri  ssion.  It  is  not  to  he  su])|iose(l  that  so  re- 
njarkahlo  a  fa(;t  as  this  should  have  escaped  the  attention  of 

mo 

rather  that  tlu;  ijiuorinu:  of  it  in  the  discussion  is  to  1)0 
attrihutcil  to  a  want  of  <lclinite  iileas  respecting  value  in  tho 
precious  metals,  as  well  as  respecting  the  mode  in  which 
changes  in  their  value  arc  accomplishecl.  The  language 
which  is  connnonly  used  on  the  sul)jcct  would  seem  to  iujply 
that  gold  and  silver  possess  throughout  the  worhl  a  uniform 
value,  and  that  all  changes  therein  proceed  in  a  uniform 
maimer,  showing  themselves  at  tho  same  time  in  all  coun- 
tries, and  in  respect  to  all  conunodities.  But  nothing  can 
he  further  from  th<'  truth  than  such  a  notion.  (lold  and 
silver,  like  all  other  vhings  which  are  the  suiijects  of  inter- 
national exchange,  possess  local  values;'  and  it  is  hy  a 
succession  of  operatitms  on  the  local  values  of  gold  of  an 
unc(|iial  and  tluctuating  character  that  its  dcpreciiiticm  is 
Iteiuir  elTectcd,  and  that  (the  conditions  of  prtiduction  re- 
maining as  at  present)  its  value  will  continue  to  <leclino. 
Tho  twofold  rise  of  prices  in  tho  gold  countries  forms  tho 
first  step  in  this  progress;  and  it  will  he  through  ;i  series  of 
similar  partial  advances  in  other  countries,  and  not  l>y  any 
general  movement,  that  tho  depreciation  of  the  metal 
throughout  the  worlil  will  Iti-  accomplished,  if  that  t  oiismn- 
niation  is  indeed  to  take  place.  With  the  <piestinn  of  do- 
preciatinn,  howe- er,  1  am  at  present  no  further  cmicerned 
than  may  lie  necessary  to  show  the  I'caring  of  these  changes 
in  the  local  values  of  gold  upnu  the  movements  of  trade,  an<l 
through  these  ujion  national  interests. 

There  is  no  need  hero  to  resort  to  argument  to  prove  that 
a  general  rise  or  a  L^eneral  fall  of  |irices,  provided  it  he 
sinudtaneous  and  uniform,  can  ho  attendcil,  always  exclud- 
ing tho  case  of  fixed  incomes  and  conti-acts  already  entered 

•  Set'  on  the  fulijoct  i)f  ilio  local  valiU'S  of  tlic  prcciouK  nu'trtJH,  liicanlo'* 
"  Works,"  pp.  "7-SO,  ami  Mill's  "  PriiicijiK'S  of  Political  Kcononiy,"  Hook  lii., 
clinps.  xix.  aiul  xxi. 


M) 


l\ 


Vii 


fl'> 


' 


n. 


li 


204 


ECONOMIC  II I  STORY. 


into,  with  no  iiupuitMiit  consoqucncos  oithcr  to  nations  or  to 
individiiuLs.  It  iw  cvidi'nt  that  such  a  chanjic  woiihl  merely 
alter  the  terms  in  whieli  transactions  are  carried  on,  not  the 
transactions  themselves.  Hut  wiien  the  rise  or  fall  of  prices 
is  not  jreneral,  in  other  words,  when  (he  chaiiLre  in  the  values 
of  the  precious  meliils  is  merely  lot;al,  it  will  lie  seen  that 
important  c()nse(|ueni  es  must  result.  Supposimr,  l'«ir  exam- 
ple, the  prices  of  all  connnoditus  produced  in  Knuliind  to  he 
doubled,  while  prices  throu<i;hout  the  rest  of  the  world  re- 
mained uneli!iMi"-ed,  it  is  evident  that  hiilf  the  commoditicH 
exp(Mte<|  friun  Kniiland  would,  und  -r  theses  circumstances, 
he  sullieieiit  to  discharge  our  fondi:  i  delils.  With  half  the 
capital  and  laltor  now  employed  in  pi'odneinj;  floods  for  the 
foreign  markets,  we  should  attain  the  same  result  as  at  pres- 
ent,—  the  procuriiitj:  of  our  imports;  while  the  remaining 
half  woulil  Ite  set  free  to  i-e  applieil  tt  other  purposes, — to 
the  further  augmeiitition  of  our  wealth  and  well-l)eing, 
Kntrland  would,  therefore,  in  the  c;ise  we  have  supposed,  he 
hcneliteil  in  all  her  foreign  dealings  to  the  fuil  extent  of  the 
rise  in  price.  On  the  other  hand,  foreign  comiti'ies  would, 
in  exchange  for  the  commodities  which  tlii'v  send  us,  receive 
in  return  of  our  commodities  l»ut  half  their  present  supply. 
Their  lahor  and  ciipital  would  go  lad  half  as  far  as  at  pres- 
ent in  commanding  <tur  prt  lucti(»ns,  and  they  would  he 
losers  in  proportion.  It  is  evident,  therefoi'c,  that  while 
nations  hav(<  not,  any  more  than  individuals,  any  interest  in 
the  positive  height  which  jtrices  may  attain,  every  nation,  as 
well  as  every  individual  trader,  is  interested  in  raising,  in 
nlatioii  lit  iiflirrx,  the  piiee  of  its  own  productions.  The 
lower  the  htcnl  value,  therefore,  of  the  prcidous  n  tals  in 
any  coimtvy,  the  gi-eater  will  lie  the  advantage  to  hat  coun- 
try  in  forei<rn  markets. 

This  lieing  the  manner  in  which  nations  are  interested  in 
chan<jres  in  the  value  of  gold,  let  us  now  oiiserve  the  elTect 
which  the  gold  discoveries  are  produeiu'j:  in  this  respect. 
As  has  lieen  already  stat<'d,  the  local  value  of  gold  in  Aus- 
tralia and  California  has  fallen  tu  one-half,  tlie  prices  uf 


;!» 


THE  NEW  GOLD. 


205 


thoir  protluclions  liavinp^  rison  in  a  twofold  proportion;'  and 
prici's  in  otlii'r  parts  of  the  world  havinjr  undciLronc  no  cor- 
rcspondinn  ('lian}:ft>,  tlu'sc  countrict}  realize  the  jiosition  which 
wo  have  just  hccn  considerinj?  in  our  hypothetical  cast!.  A 
given  (plant ily  of  their  (Capital  and  lal)or  goes  twice  as  far  as 
formerly  in  conunandinL^  fort'i^;n  |)ro(hH'tions,  whili'  a  trivi-n 
(pianlity  of  foreign  laltor  and  capital  ^oes  only  one-half  as 
far  in  conini:indiii;x  theirs.  The  world  has  thus,  throii;i;h  the 
{?old  discoveries,  been  placed  in  its  dealings  with  I'alifornia 
and  Australia  at  a  commercial  disadvantage;  and  from  this 
disadvantage!  it  can  only  escape  (always  supposing  the  pres- 
ent coiulitions  of  producing  gold  to  continue)  liy  raising  the 
prices  of  its  productions  in  a  correspi»nding  degree.  Kvcry 
country,  therefore,  is  interested  in  raising  as  rapidly  as  pos- 
Bil)lc  tlio  prices  of  its  productions,  — in  other  words,  in  the 
ir  st  rapid  possiide  deprecialion  in  the  local  value  of  its 
gold.''^  The  sooner  this  is  elVecled,  tiie  sooner  will  the  coun- 
try ho  restortMl  to  its  natural  conniiercial  footing  in  relation 
to  Australia  and  (/alifornia;  while  in  relation  to  cmmtries 
where  prices  do  not  rise  with  thtj  same  rapidilv,  it  will  pos- 
sess tlie  same  kind  of  advantage  which  is  now  enjoyed  ly 
the  gold  countries. 

This  coiit'lusion,  I  find,  is  directly  at  variance  with  tin* 
opinion  of  some  economists  of  eminence.  .Mr.  .M'Culloch, 
for  cxnuiple,  in  his  recent  eontriitutiou  to  the  "  Kncyclopa>dia 
Hritanuic'i," ''  niMintains  ^Mhat  the  misihievous  inlluence 
resulliuL,  from  a  fall  in  the  value  of  the  precious  ux'tiils  de- 
pends in  a  great  measure  on  the  rapidity  with  which  it  is 
brought    aiiout  "      iSuf    1    apprehend    the   dilTerence    between 

1  'I'liis  NtaliMiK'iii  irt  not  Kivcn  ua  Htri<'liy  tti'curiito.  On  the  wliolc,  tlic>  ml- 
vanci-  i)f  lociil  prices  in  the  ijohl  coiinlriiK  In  at  presi'iit  (lS.')il)  comiiilcriilily 
niiiro  thiin  thin,  —  minii'  it'iuliii);  iirticlfH.  iik  hniiHc-rcnt,  nioaf,  etc.,  Imvinit  riccn  in 
a  fiiiiriiilil  |iri>porlioii  nml  upwiinlti.  I  nih>]H  thr  prnporti'Mi  of  two  to  onr,  be- 
cause  Mimify  tt;j}{es  Imve  riwn  in  iiliout  thin  rulio.  iiiiil  money  w;i(res,  iiniler  a 
ileprei  iiiliun  of  the  pre('ioii>  micIuIh,  uiliiimiely  jjovitm  money  prices. 

"  For  the  ({ciienil  i,rTMiml  .if  this  lUHiertion  the  reatlcr  i«  referred  to  .Mr.  Mill's 
chapters  on  Interimtio.ial  Vh1iii'«  and  on  .Money  us  an  Imported  Comtnoility, 
in  his  "  IVineiples  c)f  I'olitical  Kcoiiuiny  ,  "  niuu  lu  Mr.  Sutuwr'*  tHMM^  "  Oa  the 
Gout  of  Ohiaiiiinc  Money." 

»  Arutli    •  rreiiuus  .MelaU." 


M 


M 


n« 


k 


wi 


266 


ECONOMIC  HISTORY. 


Mr.  M'Ciilloeh  and  myself  arises  from  his  attending  exclu- 
sively to  a  single  class  of  consequences, — those,  namely, 
which  result  in  the  case  of  fixed  contracts,  from  a  deprecia- 
tion of  the  standard.  With  respect  to  this  class  of  efi'ects, 
it  is  (|uite  true  that  the  evils  which  they  involve  ,vill  be 
increased  by  the  rapidity  of  the  depreciation;  but  as  I  have 
shown,  the  new  gold  is  producing  effects  quite  independently 
of  its  operation  upon  fixed  contracts;  and  it  is  to  those  other 
elVects  that  the  statement  1  have  just  made  is  intended  to 
ai)ply.  The  distinction  which  1  have  in  view  will  l)e  best 
cxemplilied  by  recurring  to  the  experience  of  the  gold  coun- 
tries. In  these  the  value  of  gold  fell  l»y  more  than  50  per 
cent  in  a  single  year,  tlu^  depreciation  involving  a  jjropor- 
tional  loss  to  creditors  with  a  correspondinjr  gain  to  debtors 
and  entailing  in  addition  those  numerous  incidental  evils 
which  always  result  from  a  sudden  disturbance  of  social 
rclati(ms.  No  one,  however,  on  Ibis  account,  will  Scay  that 
the  sudden  depreciation  of  gold  in  Australia  and  California 
was  not  for  these  countries  a  great  gain.  The  nature  and 
extent  of  that  gain  1  endeavored  on  a  former  occasion  to 
estimate.*  It  consisted,  as  I  showed,  in  the  increased  com- 
mand conferred  by  the  cheapness  of  their  g(dd  over  mar- 
kets in  which  gold  prices  had  not  ]»roportionally  risen. 
With  every  rise  in  the  price  of  Australian  and  Califoruian 
products,  i»r,  what  comes  to  the  same  thing,  with  every  fall 
in  the  local  value  of  their  gold,  their  })ovver  of  jturchase  in 
foreign  markets  increased, —  an  increase  of  purchasing  power 
which,  as  we  know,  was  immediately  followed  l>y  a  sudden 
ai\d  extraordinary  inllux  of  foreign  goods.  Now,  precisely 
the  same  principle  applies  in  the  case  of  other  countries.  A 
fall  in  the  value  of  gitld  will,  where  gold  is  the  standard, 
lead  to  a  disturiiance  in  fixed  contracts,  with  the  concomi- 
tant evils;  but  it  will  at  the  same  time,  as  in  the  I'ase  just 
C(msidcrcd,  place  the  countries  in  which  it  occurs  in  a  better 
position  conimercially  in  the  markets  of  Ihe  world.  Suppos- 
ing, for  example,  a  rise  in  prices  to  take  place  in  all  com- 
mercial countries  equivalent  to  that  which  has  occurred  in 

»  See  Cairnes,  p  39. 


THE  NEW   GOLD. 


2G7 


W 

1.1 


II  ■ 


California  and  Australia,  the  consocjucncc  would  be  what  I 
endeavored  to  explain  in  the  paper  just  referred  to;  the 
export  of  gold  from  California  and  Australia,  at  least  on  its 
present  scale,  would  at  once  cease,  and  the  world  would  re- 
ceive instead  an  increased  supply  of  agricultural  and  pastoral 
products,  aiul  of  (jther  commodities  which  those  countries 
arc  fitted  to  j)roduce,  — a  result  which,  I  ventured  to  think, 
would  bo  a  gain  for  the  world.  On  the  other  hand,  suppos- 
ing the  rise  in  price  to  bo  confmed  to  a  single  country,  —  say 
to  England, — then  England  would  at  once  bo  placed  on  a 
footing  of  commercial  e(puility  with  California  and  Austra- 
lia, while  as  regards  other  coimtries  she  would  occupy  the 
same  vantage-ground  which  California  and  Australia  now 
])osscHs.  She  would,  in  short,  obtain  her  gold  at  half  its 
present  cost  (for  she  would  receive  twice  as  much  as  at  pres- 
(Mit  in  return  for  the  same  expenditure  of  lal)or  and  capital), 
while  the  gold  thus  obtained  would  be  expended  on  foreign 
commodities,  of  which,  according  to  the  hypothesis,  the 
prices  had  not  risen.  Notwithstanding,  therefore,  the  evils 
which  undoubtedly  attend  variations  in  the  standard  of 
value,  more  especially  in  an  old  and  highly  artificial  com- 
munity like  ours,  it  is  nevertheless,  I  nuiintain,  for  the  in- 
terest of  every  country,  that,  a  fall  in  the  cost  of  gold  having 
Im'cu  effected,  the  progress  of  depreciation  should  in  it  be  as 
rapid  as  possiljle.  Until  by  a  depreciation  of  gold  corres- 
ponding to  that  which  has  occurred  in  California  and  Aus- 
tralia, the  value  of  that  metal  is  brought  into  harmonv  with 
its  cost,  we  must  continue  to  receive  fnmi  those  countries 
little  more  tlian  a  Itarreu  addition  to  our  stock  of  money. 
IJut  with  each  successive  step  in  the  jjrogress  of  deprecia- 
tion, there  will  be  for  the  nation  in  wliieh  it  occurs,  a  nearer 
api>ro!ich  to  the  footing  of  connui'rcial  e(puility  witli  the  gold 
countries  froi  i  which  it  has  l)een  temporarily  displaced, 
while  in  its  dealings  with  other  places  wh(>re  the  decline 
has  been  less  rapid,  the  nation  so  circumstanced  will,  during 
the  period  of  transition,  enjoy  a  commercial  superiority. 
As  a  general  conclusion,  therefore,  we  may  say  that  i;i 
projjortion  as  in  any  country  the  local  de}»rcciatioii  of  gold 


n 


e 

•Ml 


!  '.J  1 


268 


K  CON 0 MIC  HIS  TOR  Y. 


n 


fe: 


is  more  or  loss  rapid  than  the  iivcnijro  rate  clsowhoro,  the 
cITcct  of  the  monetary  disturbance  will  bo  for  that  country 
beneficial  or  injurious. 

Thi8  conclusion,  I  nmy  in  passin-r  remark,  throws  li]trht 
upon  a  practical  iiucstion  of  sonic  interest  at  the  present 
time,  —  1  mean  tin;  question  of  introduciiifj^  a  p»!d  currency 
into  India.  The  measure  has  been  advocated  by  Mr, 
M'Culloch,  on  the  ground  that,  by  providing  a  new  njarket 
for  tlu^  increasetl  supplies  of  gold,  its  cITect  would  be  "to 
counti'ract  that  fall  in  its  value  which  is  so  generally  aj)pre- 
heiuled."'  There  can  be  no  doultt  that  the  effect  of  the 
measure  would  be  wluit  Mr.  M't'uUoch  describes;  but,  if 
the  above  reasoning  be  sound,  this  circumstance,  instead  of 
being  a  reason  km-  intnjducing  gold  into  the  currency  of  In- 
dia, iifTords  {»o  Jar  ax  the  ititcrcxts  <>/  Iinlld  arc  concerned)  a 
strong  reason  against  the  ad<»pti(»n  of  this  course.  Mr. 
M't.'ulloch  does  not  state  whether  the  elTect  wliich  he  antici- 
pates u|)on  the  value  of  gold  would  l)e  general  or  local; 
whether  extending  over  ihe  whole  conuuercial  world  or  con- 
fined to  the  markets  (»f  India,  — a  point  of  vital  importance 
in  d(  (crmining  the  character  of  the  result.  If  the  effect  were 
general,  —  if  whih;  counteracting  depreciation  in  India,  it 
influenced  the  value  of  gold  proportionateli/  in  other  parts 
of  the  world, — then  it  must  be  concede(l  that  the  result 
would  l)e  entirely  Ijenelicial.  The  evils  incident  to  a  dis- 
turbance of  fixed  contracts  would  be  avoided,  and  no  others 
would  be  incurred.  But  this  is  just  the  point  vthich  I  ven- 
ture to  deny.  The  adoption  of  gold  as  the  monetary  stand- 
ard of  India  would  certainly  not  afl'ect  the  local  value  of 
gold  in  Australia  and  Calit'ornia;  for,  as  I  jtroved  (m  a  for- 
mer occasion,  the  value  of  gold  in  these  countries  is  deter- 
mined by  its  cost,  and  its  cost  ilepends  on  tlie  p-oductivencss 
of  the  gold-lu'lds.  Nor,  for  reasons  which  will  be  hereafter 
stated,  would  it  influence  more  than  in  a  slight  degree  the 
range  of  gold  ])riccs  in  England  and  the  United  States. 
The  operation,  therefore,  of  the  measure  would  be  to  depress 


p! 


1 !    !■■■ 


"  Encyclopedia  Britannica,"  article  "  Precious  Metals,"  p.  473. 


t' 


If. 


THE  NEW  GOLD. 


269 


gold  prices  in  India,  or  at  least  to  prevent  them  from  rlsinjj; 
in  that  tiuarter  as  rapidly  as  they  otherwise  would;  whih;  in 
California  and  Australia,  in  Knjfland  and  the  United  States, 
it  left  their  course;  substantially  unafVeeted.  Now  this  re- 
sult would  tend  undoubtedly  to  the  advanta«?o  of  California 
and  Australia,  of  En;;land  and  the  Uniti'd  States,  l)ut,  as 
it  seeuis  to  me,  would  as  clearly  be  injiu'ious  to  India.  Tho 
purchasiui;  power  of  the  former  countries  over  the  markets 
of  India  would,  through  the  relative  8U|)eriority  of  their 
prices,  l)e  increased,  but  tho  purchasinj?  i)ower  of  India  over 
their  markets  would,  for  tho  o])posite  reason,  be  diminished. 
An  Kn'_dish  or  American  merchant,  instead  of  diseharf^ing 
his  debts,  as  at  present,  through  the  medium  of  silver  which 
ho  has  to  purchase  with  gold  at  (52J.  per  ounce  (and  may 
sixm  have  t"  purchase  at  a  higher  rate),  might  discharge  the 
same  debts  *ilh  gold  directly;  and  gold  l)eing  by  hypothesis 
more  valualde  in  India  than  before,  the  same  amount  would 
of  coiu'se  go  farther.  But  an  Indian  purchaser  of  English  or 
American  commodities  would  have  the  same  sum  in  gold  to 
pay  as  if  no  change  had  taken  place  in  tho  currency  of  In- 
dia; while  the  gold  prices  of  his  native  productions  being 
lower,  his  al)ility  to  pay  would  ol  course  be  less,  it  seems 
to  me,  therefore;  (and  the  ccjnsiderations  here  adduired  are 
entirely  indi  pendent  of  the  reasons  which  exist  on  the  score 
of  good  faith,  — tho  Indian  debt  having  been  contracted  in  a 
silver  currency),  that,  viewing  the  matter  from  the  side  of 
Indian  interests,  the  introductiim  of  a  gold  currency  into 
India  juust  bo  regarded  as  a  measure  decidedly  detrimental.* 


'i'i 


1%  \\\> 


'  RcfcrriiiR  to  tlic  ndoption  of  a  silvor  stniiJanl  by  'Ilollnnd  in  1851,  Mr. 
M'Ciilloi'li  cliiiriictorizi's  it  as  a  nu'iisuri'  "  in  oiiiiosition  to  nil  tiontnl  principli's." 
I  confess  I  am  at  a  loss  to  conji'ctiirf  what  sound  principle  was  violati'cl  in  i)rc- 
fi'rring  as  the  standard  of  valnu  that  metal  the  value  of  wiiieli  tliere  was  every 
reas(m  to  helieve  would  be  the  steadier  of  the  two.  [I  may  say  now  (1K72) 
that  I  am  disposed  to  assign  much  less  importance  to  this  (inestion  of  a  cliango 
in  tlie  monetary  staiitlard  of  India  than  I  tlid  when  the  aliove  passajie  was 
written.  The  reasonin)^  assumes  the  possibility  of  a  serious  (liverp;enco  in  tlic 
relative  values  of  nold  and  silver;  but  I  now  believe  that  such  a  diver^ieiice  is 
practically  out  of  the  (juestion,  the  grounds  for  which  oi)inion  wdl  be  found 
farther  on  \_Cairnes,  p.  141  ].  This  eircunistance,  however,  does  not  alTect  the  tlico- 
retic  point  argued  with  Mr.  M'CuUoch.    //'  the  exchange  of  tlie  existing  silver 


■•A 


':  ::i\A\ 


Til 


I  III  <i  II  II  .i.ijir 


w 


if 


if'  I 


'i  i 

II-; 

!  i 


in 


iili 


870 


ECOSOMIC  HISTORY. 


Rcdiniinfj;  once  moro  to  flic  f^cncriil  tiucation  wo  may  con- 
Hidcr  tlic  iDlldwiii};  (MdicliisiHUH  as  ('stalilislu'd :  Ist,  tlial  llic 
(•nVcl  nl'  \\w  clK'niit'iiiiitr  ••!"  ;^i»l(l  upon  conuiiciTial  ctiiintrit's 
Itciii^  to  ('oiupol  llu'in  to  cularjrt'  tlicir  metallic  (Mincncits, 
for  which  ciilar^'cnicnt  they  must  pay  hy  an  export  ol'  their 
j)ro<liictions,  ciich  c(Uintry  will  enilure  a  loss  upon  this  head 
to  the  extent  ol"  the  additional  sum  which  may  he  reipiisite 
for  each;  and  -dly,  that  while  there  will  he  a  fjjeneral  loss 
from  this  eaiisc,  yet  the  profiress  ol'  depreciation  over  the 
world  not  licinir  uniform  or  sinmltancous,  thi>  primary  lost) 
may,  throuji'h  the  disttirliancc  in  intcruat iomil  values  thence 
arisintr  in  particular  cases,  he  compensated  or  even  con- 
verted into  ii  positive  irain;  the  loss  w  jrain  upon  the  dis- 
turbance hcinir  determined  accfirdinir  as  tlu  rise  of  prices  in 
any  country  is  in  advance  or  in  arrear  of  tlie  <rcneral  avcraire. 
To  ascertain,  therefore,  the  effect  of  the  movement  upon  any 
particular  nation,  we  must  consider  the  manner  in  which, 
in  its  case,   these  two  principles  will  operate. 

With  I'espcot  to  the  first,  I  am  aware  that,  in  spenkiiiL''  of 
the  loss  imposed  on  a  country  hy  the  necessity  of  eiilaruinjf 
its  eurreney, — hy  the  necessity  of  reccivinj;'  and  keepintr 
increased  supplies  of  <rold  and  silver, —  1  am  usiiiir  lani^iiatre 
which,  notwithstandinu;  what  was  said  on  a  f(wmcr  occnsion 
in  its  just ilical ion,  and  not withstandiiiir  that  it  is  mcndy  in 
strict  conformity  with  the  most  (dementary  priiu-iplcs  of 
economic  science,  will  still  afipear  paradoxical  to  niiiny.  I 
would,  therefore,  heforc  proceedin<r  farther  with  this  hrandi 
of  tlu'  arsrument,  ask  tli(>  reader  to  consider  the  east;  of  a 
private  mercliunt  who  is  compelled  to  increase  the  stock  of 
cash  with  which  he  carries  on  his  husiness.  The  metallic 
circiil.it ion  of  a  country  performs  in  relation  to  the  com- 
munity functions  jireciscly  analogous  to  those  which  arc  dis- 

fnr  a  p.oh\  stiiinliird  in  India  wore  enlcnlafcil  to  produop  the  offocts  Mr.  MTiil- 
lofli  t'xpi'ctiMl  from  it,  tlu'  ini'asiire,  it  si  ill  scfins  to  nic,  would  Itc  opt'ii  to  Hit- 
ol>ji'ctions  I  have  iirfrcd  nj;ainsl  it.  Hut  I  do  not  liclicvc  tliat  tlie  I'ffi'cts  in 
question  woidd  result  ;  and  I  enn  well  eoneeivo  tlmt,  liaviiij;  rojiiird  to  tlio 
general  convenience  of  coniiiUToe,  tiie  change  iiiiglil,  on  tiie  wiiole,  be 
advantageous.] 


1 


t!  ■'■■ 

Mi    1 


THE  NKW  COLD. 


271 


clinrtrpd  for  a  moroliiint  liy  hii*  cuhIi  rosorvo.  Tf  n  morchnnt 
Oiia  HiilVIy  (lispciisc  with  a  p(»rtioii  (tf  liis  rc-idy  ciisli,  he  is 
(Mml»I('(|,  with  the  money  thus  lilu'riitcd,  citlicr  to  iidd  to  liiH 
productive!  I'lipitiil  or  to  iiu'roiiHo  his  piivatc  cxpciiditiiiT. 
On  the  other  hand,  if  he  finds  it  necessary  to  increase  iiis 
reserve  of  cash,  his  productive  capital  ninst  he  proportionally 
encroa»die(|  upon,  or  his  private  expenditure  pioportioiuilly 
curtailed.  And  preciscdy  the  same  niay  Ite  said  of  the  cur- 
rency of  a  nation,  Wheie  a  country  does  not  itself  yi(dd 
g(dd  or  silvei', '  i'vrvy  increase  of  its  metalli(!  circulation 
nuist  he  obtained — can  only  he  obtained — hy  parti njf  with 
certain  (dements  of  real  wealth, — (dements  which,  liut  for 
this  necessity,  niiuht  lie  made  conducive  to  its  w(dl-iieinj;. 
it  is  in  enahlini^  a  nuti(m  to  reduce  within  the  narrowest 
limits  this  unproductive  portion  of  its  stock  that  the  (diief 
advantai;e  of  a  ^ood  Itankin^  system  consists;  and  if  tiie 
augmentation  of  the  metaHi(!  eurreiu-y  of  a  coimtry  lie  not 
an  evil,  then  it  is  dilliciilt  to  see  in  what  way  the  institution 
of  hanks  is  a  j^ood.  In  regarding?,  therefore,  tlie  necessity 
imposed  u|ion  commendal  countries  of  enlar^injr  their  metal- 
lic currencies  as  injurious  to  their  interests,  I  make  no  as- 
sumption whi(di  is  not  in  perfect  keepinur  with  the  hest 
known  and  most  jj;enerally  reooj^iii/.ed  facts  of  commercial 
exporience. 

An  increase  in  the  metallic  cnrrency  of  a  country,  tluni, 
heinij;  an  evil,  let  us  consider  what  the  circumstances  are  liy 
whi(d»  the  au'i'inentalion  rendered  necessary  liy  the  {^old 
discoveries  will  lie  determined.  This,  it  is  evident,  will 
principally  depend  —  the  amount  of  liusiuess  to  he  carried  on 
hein<^  jjiven  —  on  the  extent  to  whitdi  siihstitutes  for  metal- 
lic money  are  in  use;  in  other  words,  on  the  de<rree  of 
peil'ection  whicli  the  hankini;  system  of  each  country  lias 
attained.  To  illustrate  this,  let  us  suppose  a  <riven  sum  of 
metallic  money,   say  a  million    stiTliii^'',    to    he    introduced 

'  Kvon  wlicrc  it  docs  yield  tlicso  iiv.'tnli<,  the  tu'('(\«sity  of  nuirinonting  tlio 
ourri'iicy  is  not  tlio  less  nn  pvii,  since  the  ojii^nition  will  ncciipy,  with  no  rcswlt 
liiit  that  of  iivoidinK  nil  iiiconvi'iiii'nco,  a  portion  of  the  liilior  iitid  <'npitnl  of 
till.'  country,  wliicli,  but  for  this,  might  hiive  contributed  to  its  iiosilivo  welfare. 


t:!ii 


Ml 


■■m 


I 


m 


■M 


¥^  .0^ 


na 


IMAGE  EVALUATION 
TEST  TARGET  (MT-3) 


V 


// 


Q- 


1.0 


I.I 


!^-||||IM    IIIII2.5 


IM    IIIII2.2 


IM 


12.0 


1.8 


1.25      1.4       1 6 

1 

< 6"     ► 

Photographic 

Sciences 

Corporation 


s 


# 


\ 


\ 


\ 


4\^ 


1^      '•^^ 

0        A         <f" 


O^ 


.;^S?-"*         O 


% 


i;^ 


f'^^;^# 


"i?,^ 


23  WEST  MAIN  STREET 

WEBSTER,  N.Y.  14580 

(716)  872-4503 


€* 


i/x 


I 


> 


il'! . 


272 


ECONOMIC  HISTORY. 


into  two  countries  in  which  the  currencies  are  differently 
constituted,  —  for  example,  into  England  and  India.  In 
India  coin  is  the  principal  medium  of  circulation^  — in 
many  parts  the  only  one,  and  consequently  a  million  sterling 
introduced  into  the  currency  of  India  would  represent  only 
an  equal,  or  little  more  than  an  equal,  addition  to  its  total 
medium  of  circulation, — to  the  whole  monetary  machinery 
by  which  the  exchange  of  commodities  is  effected  and  prices 
maintained.  But  in  England,  where  the  currency  is  differ- 
ently constituted,  the  result  would  be  different.  The  great 
bulk  of  the  circulating  medium  of  this  country  consists  of 

1  [The  reader  will  bear  in  mind  that  this  was  written  in  1859.  The  state  of 
the  Indian  currency  at  that  time  may  be  gathered  from  the  following  extracts 
from  a  paper  on  "  The  Trade  and  Commerce  of  India,"  read  before  the  British 
Association  in  1850.]  "  Intimately  connected  with  Indian  trade  and  commerce 
is  a  sound  system  of  banking.  At  present  there  are  only  three  banks  of  impor- 
tance in  India,  —  the  banks  of  Bengal,  Bombay,  and  Madras.  These  have  no 
branches,  the  absence  of  which  constitutes  one  of  the  main  defects  of  tlie  sys- 
tem. The  fev  other  banks  in  India  do  not  issue  notcS;  and  employ  their  capi- 
tal in  makinf,  advances  on  bills  of  lading,  in  exchange  operations,  and  in  some 
instances  in  loans  to  members  of  the  Service,  at  high  rates  of  interest ;  but 
afford  no  banking  facilities  for  conducting  the  internal  tra<le  of  the  country." 
The  writer  then  refers  to  a  table,  showing  the  state  of  the  three  loading  banks 
(Bengal,  Bombay,  and  Madras)  in  the  preceding  June,  from  which  it  appears 
that  the  bullion  at  that  time  in  the  coffers  of  the  banks  was  in  excess  of  the 
notes  in  circulation,  the  amount  of  these  latter  being,  for  the  whole  of  India, 
£2,241,471,  or  about  one-te'i"i  of  the  amount  issued  by  the  Bank  of  England 
alone;  while  the  total  amount  of  "accounts  current"  was  only  .£1,855,000, — 
aboJt  one-sixth  of  those  held  by  some  of  the  private  banks  of  London,  and  not 
one-fifteenth  of  those  of  the  Bank  of  I-^ngland.  The  total  amount  of  commer- 
cial bills  discounted  in  these  three  leading  banks  of  India  is  set  down  at  £278,- 
ftOO!  "  And  this,"  it  is  observed,  "  in  a  country  where  the  gross  annual  revenue 
is  .£34,000,000 ;  the  export  trade,  on  an  average  of  the  last  five  years,  £24,000- 
000;  the  import  trade,  on  the  same  average,  £23,000,000,  witli  an  internal  trade 
to  an  extent  almost  impossible  to  estimate."  ("  The  Trade  and  Commerce  of 
India,"  by  J.  T.  Mackenzie,  reail  before  the  British  Association,  1859,  pp.  15, 
16.)  In  tlic' evidence  taken  before  the  late  Committee  "  On  Colonization  and 
Settlement  in  India,"  Mr.  Alexander  Forbes,  when  questioned  with  reference  to 
the  large  absorption  of  silver  in  India,  expressed  his  opinion  that  the  silver  was 
all  required  for  current  coin.  "  It  lias  often  been  said  that  the  natives  hoard 
silver.  Now  my  experience  is  that  they  do  not  hoard  silver;  tliey  hoard  gold; 
and  that  the  silver  is  actually  required  for  the  commerce  of  the  country."  And 
this  he  traces  (Answers  2,222,2,223,2,372-80)  to  the  want  of  banking  accom- 
modation and  the  imperfect  means  of  communication  generally  in  the  country. 
See  also  the  evidence  of  Mr.  Mangles  (Answers  1,025-1,633). 


1 


THE  NEW  GOLD. 


273 


certain  forms  of  credit;  and  the  amount  of  these  credit 
media  standing  in  a  certain  large  proportion  to  the  coin  in 
the  country,  the  effect  of  introducing  a  million  sterling  into 
our  currency  would  be  to  increase  the  medium  of  circulation 
by  an  amount  very  much  greater  than  that  of  the  added  coin. 
Let  us  consider  for  a  moment  what  becomes  of  a  sum  of  coin 
or  bullion  received  into  England.  I  do  not  now  speak  of 
that  moving  mass  of  metal  which  passes  (so  to  speak)  through 
the  currency  of  the  country,  —  which,  received  to-day  into 
the  vaults  of  the  Bank  of  England,  is  withdrawn  to-morrow 
for  foreign  remittance,  —  but  of  gold  which  is  permanently 
retained  to  meet  our  genuine  monetary  requirements.  Of 
such  gold  a  portion,  greater  or  less,  according  to  circum- 
stances, will  always  lind  its  way  into  the  channels  of  retail 
trade ;  and  so  far  as  it  follows  this  course,  its  effect  in  aug- 
menting the  circulation  will  be,  as  in  India,  only  to  the 
extent  of  its  actual  amount.  But  a  portion  will  also  be 
received  into  the  banks  of  the  country,  where,  either  in  the 
form  of  coin,  or  of  notes  issued  against  coin,  it  will  consti- 
tute an  addition  to  their  cash  reserves.  The  disposable  cash 
of  the  banks  being  thus  increased,  an  increase  of  credit 
operations  throughout  the  country  would  in  due  time  follow. 
The  new  coin  would  become  the  foundation  of  new  credit 
advances,  against  which  new  checks  would  be  drawn,  and  new 
bills  of  exchange  put  in  circulation,  and  the  result  would  be 
an  expansion  of  the  whole  circulating  medium  greatly  in 
excess  of  the  sum  of  coin  by  which  the  new  media  were 
supported.  Now,  credit,  whatever  be  the  form  which  it 
assumes,  so  long  as  it  is  credit,  will  operate  in  purchases, 
and  affect  prices  in  precisely  the  same  way  as  if  it  were 
actually  the  coin  which  it  represents.  So  far  forth,  there- 
fore, as  the  new  money  enables  the  country  to  support  an 
increase  of  such  credit  media, — to  support  them,  I  mean,  by 
cash  payments,  —  so  far  it  extends  the  means  of  sustaining 
gold  prices  in  the  country;  and  this  extension  of  the  cir- 
culating medium  being  much  greater  than  in  proportion  to 
the  amount  of  added  coin,  the  means  of  sustaining  gold 
prices  will  be  in  the  same  degree  increased.     Thus,  suppos- 

18 


274 


ECONOMIC  HISTORY. 


'*  ,  ,     s      ra 


'H 


ing  the  ratio  of  the  credit  to  the  coin  circulation  of  the 
country  to  be  as  four  to  one  (and  the  proportion  is  greatly  in 
excess  of  this),  the  addition  of  one  million  sterling  of  coin 
would  be  equivalent  to  an  increase  in  the  aggregate  circula- 
tion of  four  millions  sterling,^  and  one  million  sterling  of 
gold  would  consequently,  in  England,  for  a  given  extent  of 
business,  support  the  same  advance  in  gold  prices  as  four 
times  that  amount  in  India.  It  follows  from  these  consid- 
erations, that  in  order  to  raise  prices  throughout  a  given 
range  of  transactions  to  any  required  level,  the  quantity  of- 
metallic  money  which  will  be  necessary  will  vary  in  differ- 
ent countries,  according  to  the  constitution  of  their  curren- 
cies; the  requirements  of  each  increasing  generally  in  an 
inverse  ratio  with  the  efficiency  of  its  banking  institutions. 

We  may  thus  see  how  very  unequal  will  be  the  operation 
of  the  gold  discoveries  with  respect  to  commercial  com- 
munities. The  reduction  in  the  cost  of  gold  to  which  they 
have  led  has,  as  we  have  seen,  produced  in  the  gold  countries 
a  twofold  rise  of  gold  prices ;  and  supposing  the  present  con- 
ditions of  raising  gold  to  continue,  the  same  cause  must 
ultimately  lead  to  the  same  result  throughout  the  world, 
imposing  upon  each  country  the  necessity  of  so  enlarging 
its  currency  as  to  admit  of  this  advance.  But  we  have 
seen  that  the  quantity  requisite  for  this  purpose  varies  ac- 
cording to  the  monetary  status  of  the  country  for  which  it  is 
required ;  and  inasmuch  as  the  new  money  must  be  paid  for 
by  commodities,  the  abstraction  of  commodities,  and  there- 
fore the  loss  of  the  means  of  well-being,  to  which  each  coun- 
try must  submit,  will  vary  with  the  same  circumstance.     On 


1  Strictly  speaking,  this  conclusion  would  not  follow  on  the  above  supposi- 
tion, the  efflciency  of  different  forms  of  credit  in  performing  the  work  of  circu- 
lation being  (as  pointed  out  by  Mr.  Mill,  "  Principles  of  Political  Economy," 
vol.  ii.,  pp.  58-01)  different,  and  only  some  of  them  being  in  this  respect  equal 
to  coin.  But  such  distinctions  do  not  affect  the  general  truth  of  the  principle 
contended  for  in  the  text,  that  the  necessity  for  coin  varies  inversely  with  the 
use  of  credit.  Besides,  as  I  intimated,  the  proportion  of  credit  to  coin  in  our 
circulation  is  much  greater  than  I  have  assumed ;  and  a  million  of  coin  taken 
into  our  currency  would  really  be  equivalent  to  more  than  four  millions  added 
to  a  purely  metallic  one. 


THE  NEW  GOLD. 


275 


the  supposition,  therefore,  on  which  we  are  arguing,  the 
quantity  of  new  money  which  England  would  require  would 
he,  when  compared  with  the  extent  of  her  business,  ex- 
tremely small,  and  her  loss  of  real  wealth  small  proportion- 
ally. The  same  would  be  true  of  the  United  States,  where 
credit  institutions  have  also  attained  a  high  degree  of 
efficiency,  and  whose  paper  consequently  forms  a  large  pro- 
portion of  the  whole  circulation.  In  France,  the  use  of 
credit  being  more  restricted,  the  requirements  for  coin 
would  be  greater,  and  consequently  also  the  loss  of  consum- 
able commodities;  while  in  India  and  China,  and  indeed  in 
Asiatic  communities  generally,  the  circulating  medium  be- 
ing almost  purely  metallic,  the  requirements  for  coin  would, 
in  proportion  to  the  business  in  which  it  was  employed, 
attain  their  maximum,  with  a  corresponding  maximum  of 
loss  in  the  elements  of  well-being.^ 

The  operation  of  this  principle  is  indeed,  in  the  actual 
circumstances  of  the  world,  in  some  degree  concealed  by  the 
complex  conditions  under  which  it  comes  into  plu,y.  Thus 
Great  Britain  and  the  United  States,  instead  of  obtaining 
the  smallest  shares,  receive  in  the  first  instance  nearly  the 
whole  of  the  new  gold.  On  the  other  hand,  the  quantity 
which  goes  to  India  and  China  from  the  gold  countries  is 
comparatively  trifling ;2  and  although  a  large  drain  of  treas- 
ure has  set  in  thither  from  Europe,  yet  this  consists  chieHy 
of  silver.     If,   however,   passing   by   the   accidents   of  the 

*  It  is  curious  to  observe  the  contradictions  in  which  persons  are  involved 
who,  still  under  tlie  intiiience  of  the  mercantile  theory  of  wealth  (and  there  are 
few  even  among  professed  economists  who  are  free  from  its  intluence),  are 
nevertheless  sensible  from  experience  of  the  advantages  of  a  system  witli  which 
it  is  incompatible.  Thus  several  witnesses  l)oforn  tiie  late  Committee  on  Indian 
Colonization  refer  to  the  large  influx  of  silver  into  India  in  recent  years  as  a  sure 
indication  of  tiie  increasing  prosperity  of  that  co.  .itry ;  yet,  almost  in  the  same 
breatli,  they  speak  of  the  deficiency  of  banking  accoiinnodation  as  among  its 
most  pressing  wants.  Now,  it  is  certain  tiiat,  just  in  proportion  as  hanking  ac- 
commodation is  extended,  tiie  absorption  of  silver  by  India  will  decline;  whence 
it  would  follow,  if  the  reasoning  of  the  witnesses  be  sound,  that  the  effect  of 
the  extension  of  banks  would  bo  to  check  the  growing  prosperity  of  the  coun- 
try.   See  "  Minutes  of  Evidence,"  Questions  1,625-1,0:!:!;  2,221-2,223. 

2  This  order  in  the  diffusion  of  the  new  gold  has  not  been  sustained.  See 
ante,  p.  252,  note. 


*m 


■'a 


.»!.« 


■»Ha 


1    .J.!'] 

i        iJ 


276 


ECONOMIC  HISTORY. 


%'A 


! 


\\ 


movement,  we  attend  to  its  essentials  wc  shall  find  that  the 
results  are  entirely  conformable  to  the  principle  I  have  en- 
deavored to  describe.  For  though  the  bulk  of  the  new  gold 
comes  in  the  first  instance  to  England  and  the  United  States, 

—  determined  thither  by  the  course  of  international  demand, 

—  yet  England  and  the  United  States  do  not  form  its  ulti- 
mate destination.  The  monetary  requirements  of  these  coun- 
tries being  easily  satisfied,  the  mass  of  the  metal  on  reaching 
these  markets  becomes  immediately  disposable  for  foreign 
purchases,  by  which  means  the  United  States  and  England  are 
enabled  to  transfer  to  other  countries  this  uni)rofitable  stock, 
the  commodities  with  which  in  the  first  instance  they  parted 
being  replaced  by  others  which  they  more  require.  So  also, 
altliough  the  jnetallic  drain  to  the  East  is  composed  princi- 
pally of  silver,  the  efilux,  at  least  in  its  present  proportions, 
is  not  the  less  certainly  the  consequence  of  the  increased  pro- 
duction of  gold,  for  the  silver  of  which  it  consists  has  been 
displaced  from  the  currencies  of  Europe  and  America  by  the 
gold  of  Australia  and  California ;  and  the  drain  to  the  East  is 
only  not  a  golden  one,  because  silver  alone  is  in  that  region 
the  recognized  standard.  As  the  final  result  of  the  whole 
movement,  we  find  that,  while  the  metallic  systems  of  Eng- 
land and  the  United  States  are  receiving  but  small  perma- 
nent accessions,  those  of  India  and  China  arc  absorbing 
enormous  supplies.  The  former  countries,  though  the  first 
recipients  of  the  treasure,  yet,  not  requiring  it  for  domestic 
purposes,  arc  enabled  to  shift  the  burden  to  others,  whose 
real  wealth  they  command  in  exchange,  while  the  latter, 
requiring  what  they  receive,  are  compelled  to  retain  it. 
Having  parted  with  their  commodities  for  the  new  money, 
they  are  unable  afterwards  to  replace  them.  As  their  stock 
of  coin  increases,  their  means  of  well-being  decline,  and 
they  become  the  permanent  victims  of  the  monetary 
disturbance. 

But,  secondly,  we  conclude  that  the  loss  of  real  wealth 
resulting  from  the  augmentation  of  their  currencies  would 
in  particular  countries  be  compensated,  and  might  in  some 
bo  even  converted  into   positive   gain,  by  the   disturbance 


^ih 


THE  NEW  GOLD. 


277 


which,  during  the  period  of  transition,  would  take  place  in 
international  values.  As  has  been  already  remarked,  a 
general  rise  of  prices  in  all  countries,  if  simultaneous  and 
uniform,  since  it  leaves  the  pro{)ortions  in  which  commod- 
ities are  exchanged  undisturbed,  leads  to  no  change  in  inter- 
national values,  and  produces  no  effect  upon  national  inter- 
ests. But  where  prices  rise  unequally,  international  values, 
and  til  rough  these,  national  interests  are  affected.  Wo  have 
therefore  to  consider  how  far,  in  the  actual  circumstances  of 
the  world,  a  rise  of  prices  in  particular  countries,  unaccom- 
panied by  a  corresponding  advance  in  others,  is  possible., 
and,  in  so  far  as  it  is  possible,  in  what  order  the  several 
changes  may  be  expected  to  occur. 

As  regards  the  question  of  possibility,  this  is  placed  be- 
yond controversy  by  the  example  of  California  and  Austra- 
lia. It  is  a  matter  of  fact  that  prices  in  those  regions  have 
advanced  in  a  twofold  proportion,  while  no  corresponding 
rise  of  prices  has  occurred  throughout  the  world.  The  cir- 
cumstances, however,  of  the  gold  countries  will  probably  be 
thought  of  too  exceptional  a  character  to  form  the  basis  of 
any  general  conclusion ;  and  it  will  therefore  be  desirable  to 
advert  for  a  moment  to  the  causes  which  produced  in  Cali- 
fornia and  Australia  that  local  elevation  of  price,  with  a 
view  to  consider  how  far  the  same  conditions  are  capable  of 
being  realized  elsewhere. 

These  causes,  as  was  formerly  shown, ^  Avere  the  special 
facilities  for  producing  gold  enjoyed  by  California  and  Aus- 
tralia, combined  with  the  limited  range  of  their  domestic 
transactions.  The  sudden  cheapening  of  gold,  involving  a 
corresponding  increase  in  money  earnings,  placed  an  extra- 
ordinary premium  on  the  production  of  the  metal,  while  the 
limited  range  of  their  domestic  trade  rendered  the  necessary 
enlargement  of  their  monetary  systems  an  easy  task.  On 
the  other  hand,  the  immense  extent  of  the  aggregate  com- 
merce of  the  world  required,  in  order  to  secure  a  similar 
advance,  a  proportional  increase  in  its  aggregate  stock  of 


'"li 

■■'li 


m 


1  See  Cairnes,  pp.  26,  26. 


278 


ECONOMIC  HISTORY. 


vm 


:!;!! 


i 


money,  an  augmentation  which  could  only  bo  accomplished 
after  the  lapse  of  a  considerable  time.  Prices  therefore  rose 
rapidly  in  the  gold  countries,  while  over  the  area  of  general 
commerce  the  rise  had  been  but  slow. 

Such  being  the  circumstances  which  produced  the  local 
divergence  of  prices  to  which  I  have  called  attention,  it  will 
at  once  be  seen  that  of  the  two  conditions  which  I  have 
stated,  the  latter  —  the  necessary  enlargement  of  the  local 
currency  —  may  in  most  countries,  though  not  in  all  at  the 
same  time,  be  ful tilled,  if  not  with  the  same  rapidity  as  in 
Australia  and  California,  still  after  no  very  long  delay.  It 
has  been  computed,^  for  example,  that  the  total  quantity 
of  gold  coin  circulating  in  Great  Britain  amounts  to 
£75,000,000  sterling.  Assuming  this  to  be  correct,  it 
would  follow  (all  other  conditions  being  sujjposcd  identical) 
that  an  addition  of  £75,000,000  would  be  sullicicnt  to  effect 
an  elevation  of  our  local  prices  equivalent  to  that  which  has 
occurred  in  Australia.  Now  at  the  present  rate  of  produc- 
tion, the  quantity  of  gold  which  arrives  annually  in  Great 
Britain  cannot  fall  much  short  of  X30, 000,000  sterling;^  so 
that  were  we  merely  to  retain  all  that  we  receive,  we  should 
at  the  end  of  two  years  and  a  half  be  in  a  position,  so  far  as 
the  augmentation  of  our  currency  is  concerned,  to  maintain 
the  same  advance  in  price  as  has  occurred  in  the  gold  coun- 
tries. If,  then,  prices  in  Great  Britain  have  not  risen  in 
the  same  degree,  the  result,  it  is  evident,  cannot  be  due  to 
the  dilificulty  of  procuring  the  supply  of  gold  necessary 
for  the  enlargement  of  our  currency.  It  remains,  therefore, 
to  be  considered  how  far  those  special  facilities  for  procuring 
gold  which  have  operated  in  the  gold  countries  may  come 
into  play  in  other  parts  of  the  world. 

The  extraordinary  facilities  for  procuring  gold  enjoyed 

'  "  History  of  Prices,"  vol.  vi.,  App.  xxii.  Tliis  also  is  Mr.  M'Culloch's  es- 
timate :  "  Enuyclopaedia  Britanniua,"  article  "  I'recious  Metals,"  p.  466.  [It 
will  be  borne  in  mind  that  these  estimates  apply  to  tiie  period  immediately 
preceding  the  first  publication  of  these  Essays  (1859-00).] 

2  [.£20,000,000  would  have  been  nearer  the  mark,  but  at  the  time  this  paper 
was  written  no  trustworthy  statistics  of  gold  imports  existed.  Either  amount, 
however,  answers  equally  well  the  purpose  of  the  argument  (1872).] 


THE  NEW  GOLD. 


279 


by  Australia  and  California  depend,  of  course,  on  the  posses- 
sion of  their  gold  mines;  and  this  being  so,  it  might  seem 
us  if  all  countries,  not  being  like  them  auriferous,  were  by 
the  nature  of  the  case  precluded  from  fulfilling  this  condition 
of  the  problem;  but  this  by  no  means  necessarily  follows, 
us  will  be  evident  if  we  reflect  that  there  are  other  modes  of 
obtaining  gold  than  by  direct  production,  of  which  modes 
the  elliciency  enjoyed  by  different  countries  differs  almost 
as  much  as  the  degrees  of  fertility  in  different  gold  mines. 
Where  countries  do  not  themselves  produce  gold,  the  mode 
by  which  they  obtain  it  is  through  their  foreign  trade. 
Now,  it  is  a  fact  well  known  to  economists^  that,  with  refer- 
ence to  the  cost  of  commodities  the  terms  on  which  foreign 
trade  is  carried  on  differ  greatly  in  different  countries,  the 
labor  of  some  going  much  farther  in  commanding  foreign 
productions  than  that  of  others.  According,  however,  to 
the  conditions  on  which  foreign  productions  generally  are 
obtainable,  will  be  those  on  which  gold  may  be  obtained. 
If  a  country  possess  special  facilities  for  supplying  markets 
where  gold  can  be  given  in  exchange,  it  will  obtain  its  gold 
more  cheaply,  at  a  less  sacrifice  of  labor  and  capital,  than 
countries  which  do  not  share  these  facilities;  and  among 
such  countries  it  will  therefore  occupy  precisely  the  same 
position  as  an  auriferous  country  whose  mines  are  of  more 
than  the  usual  richness  among  the  countries  which  yield 
gold.  It  is  thus  possible  for  a  non-auriferous,  no  less  than 
for  an  auriferous  country,  to  possess  exceptional  facilities  in 
the  means  of  procuring  gold,  and  therefore  to  fulfil  the  sec- 
ond of  the  conditions  by  which  a  divergence  of  local  prices 
from  the  ordinary  level  of  the  world  may  be  effected. 

No'.v  it  appears  to  me  there  arc  two  countries  which  pos- 
sess in  an  eminent  degree  the  qualifications  i-ecpiisite  for 
attaining  this  result,  1  mean  Great  Britain  and  the  United 
States,  the  former,  as  being  par  excellence  the  great  manu- 
facturer among  civilized  nations,  —  the  manufacturer  more 

1  See  Ricardo's  "  Works,"  chap,  vii.,  on  Foreign  Trade.  Mill's  "  Principles 
of  Political  Economy,"  chaps,  xvii.,  xix.  Also,  Senior's  Essay,  "  On  the  Cost 
of  Obtaining  Money." 


■'ii 


ii 


■I 


^h   51 


i:d 


<  'A 


\'4 


I"  4 


— •'■'-nirTi-i7i"rTT»™  rrTrrmiitr 


280 


ECONOMIC  HISTORY. 


^j^y 


a 


;t      H; 


h 


particularly  of  descriptions  of  goods,  —  as  cotton,  woollen, 
linen,  and  iron,  which  enter  largely  into  the  consumption  of 
the  classes  by  whom  chiefly  the  gold  countries  are  peo[»led ; 
and  the  latter,  as  the  principal  producer  of  raw  material,  as 
well  as  of  certain  commodities, — as  grain,  tobacco,  sugar, 
and  rice, — which  are  also  largely  consumed  by  the  same 
classes.  In  tliesc  circumstances  Great  Britain  and  the  United 
States  enjoy  peculiar  advantages  in  the  miirkots  of  the  gold 
countries,  and  these  advantages  are  extended  and  confirmed 
by  other  important  incidents  of  their  position.  Thus  they 
possi!Ss  the  greatest  mercantile  marine  in  the  world,  by  which 
they  are  enabled  to  give  the  fullest  8co[)e  to  their  manufac- 
turing and  agricultural  superiority,  while  by  race,  language, 
and  religion  they  arc  intimately  connected  with  the  i)roduc- 
ers  of  the  new  gold,  —  a  connection  from  which  spring  ties, 
moral,  social,  and  political,  to  strengthen  and  secure  those 
which  commerce  creates.  Great  Britain  and  the  United 
States  thus  possess  in  their  foreign  trade  a  rich  minc,^ 
worked  by  their  manufacturers,  planters,  and  farmers,  tended 
by  their  mercantile  marine,  and  protected  by  their  naval 
power,  —  a  mine  by  means  of  which  they  are  enabled  to  ob- 
tain their  gold  on  terms  more  favorable  than  other  nations. 
The  effect  of  this  in  ordinary  times  is  shown  by  a  scale  of 
money  rates,  wages,  salaries,  and  incomes,  permanently 
higher  than  that  which  elsewhere  prevails ;  but  in  times  of 
monetary  disturbance  like  the  present,  when  the  cost  of 
gold  having  been  reduced  its  value  is  falling,  these  advan- 
tages, it  seems  to  me,  must  tell,  as  analogous  advantages 
have  told  in  the  gold  countries,  in  a  more  rapid  realization 
of  the  results  which  are  in  store,  —  in  a  quicker  ascent 
towards  that  higher  level  of  prices  and  income  which  the 
cheapened  cost  of  gold  is  destined  ultimately  to  produce. 

There  is  reason,  therefore,  on  considerations  of  theory,  to 
expect  a  repetition  in  England  and  America  of  that  phe- 

1  The  mine  worked  by  England  is  the  general  market  of  the  world ;  the 
miners  are  those  who  produce  those  commodities  by  the  exportation  of  which 
the  precious  metals  are  obtained.  —  Senior's  Essay  "  On  the  Cost  of  Obtaining 
Money,"  p.  16. 


THE  NEW  GOLD. 


281 


iiomcuou  which  has  been  alre.idy  exhibited  in  Australia  and 
California, — a  diver<i;cncc  of  local  money-rates  from  the 
average  level  of  surrounding  countries.  On  a  future  occa- 
sion I  shall  endeavor  to  ascertain  how  fur,  in  the  case  of 
Oreat  Britain,  these  a  priori  conclusions  arc  sui)ported  by 
facts, — how  far  prices  and  incomes  have  here,  under  the 
influence  of  the  gold  discoveries,  outstrij)ped  the  correspond- 
ing movement  in  other  countries.'  Having  settled  this 
point,  we  shall  be  in  a  position  to  form  a  general  estimate  of 
the  benefit  which  may  thence  accrue  to  us.  Meanwhile, 
however,  I  nuiy  in  conclusion  point  out  the  mode  in  which 
the  advantages  incident  to  the  monetary  position  wc  shall 
occupy  arc  likely  to  be  realized. 

And  here  it  may  be  well  to  call  the  reader's  attention  to 
the  distinction,  sometimes  overlooked,  between  a  fall  in  the 
value  of  gold  and  a  rise  in  the  price  of  commodities.  A  rise 
in  the  price  of  commodities  if  general,  implies  commonly  a 
fall  in  the  value  of  money;  but,  according  to  the  ordinary 
use  of  language,  alike  by  economists  and  common  speech, 
money  would,  I  apprehend,  in  certain  circumstances,  be  said 
to  have  fallen  in  value,  even  though  the  prices  of  large 
classes  of  commodities  remain  unatt'ected.  For  example, 
supposing  improvements  to  have  been  effected  in  some 
branch  of  production  resulting  in  a  diminished  cost  of  the 
commodity,  the  value  of  money  remaining  the  same,  prices 
would  fall ;  if  imder  such  circumstances  prices  did  not  fall, 
that  could  only  l)e  because  money  had  not  remained  the 
same,  but  had  fallen  in  value.  TJic  continuance  of  prices 
unaltered  would,  therefore,  under  such  circumstances,  amount 
to  proof  of  a  fall  in  the  value  of  gold.  Now,  when  in  con- 
nection with  this  consideration,  we  take  account  of  the  fact 


111*  * 


'  [Some  evidence  on  the  point  will  be  found  in  the  Appendix  (see  Cairnes) ; 
but  the  inquiry  here  contemplated  was  never  carried  into  effect.  A  very  inter- 
esting and  carefully  prepared  paper  on  the  subject,  however,  was  read  some 
years  later  by  my  friend  Professor  Jevons,  before  the  London  Statistical  Society, 
when  I  had  the  satisfaction  to  find  that  the  results  of  his  entirely  independent 
investigations  to  a  very  large  extent  corroborated  the  conclusions  at  which  I 
had  arrived,  mainly  by  way  of  deduction  from  the  general  principles  of  the 
science] 


.  ^1 

>  'in 


!<*r' : 


liM,'.5:r 


,ir 


p:  Villi 


282 


ECONOMIC  HISTORY. 


tliat  over  the  j^roater  portion  of  tlio  field  of  British  industry 
inij)rovc'mcnt  is  constantly  taking  plac(!,  it  is  obvious  that 
tlio  nicro  movements  of  ])rice8  hero,  taken  without  reference 
to  tlie  conditions  of  production,  arc  no  sure  critcron  of 
changes  in  the  vahie  of  gold. 

The  truth  is,  in  a  large  class  of  commodities,  in  all  those 
to  which  mechanical  or  chemical  inventions  are  extensively 
applicable,  even  on  the  supposition  of  a  very  great  deprecia- 
tion of  gold,  no  considerable  advance  in  price  is  probable. 
Gold,  for  example,  might  have  fallen  since  the  beginning  of 
the  present  century  to  the  extent  of  75  per  cent,  that  is  to 
say,  four  sovereigns  now  might  be  e(pial  to  no  mcn-e  than 
one  sovereign  at  the  commencement  of  the  period,  and  yet 
in  a  large  class  of  manufactured  goods  no  advance  in  price 
would  be  ajiparent,  the  reduction  in  the  cost  of  production 
being  in  more  than  an  equal  proportion.  In  ordinary  times 
agricultural  operations  escape  in  u  great  degree  the  influence 
of  industrial  progress ;  but  within  the  last  ten  years,  that  is 
to  say,  since  the  repeal  of  the  Corn  Laws,  which  nearly 
synchronized  with  the  gold  discoveries, — the  spirit  of  im- 
provement has  been  as  busy  in  agriculture  as  in  any  other 
department  of  industry,  and  in  conjunction  with  importa- 
tions from  foreign  countries  has  acted,  and  must  for  some 
time  at  least  continue  to  act  powerfully  upon  the  price  of  raw 
products  in  this  country. 

The  depreciation  of  gold,  therefore,  may  be  realized  cither 
in  a  corresponding  advance  of  prices,  or  in  the  neutraliza- 
tion of  a  fall  which,  in  the  absence  of  depreciation,  would 
have  occurred ;  but  in  whatever  form  it  may  come  to  us,  our 
gain  or  loss  as  a  nation  will  be  the  same,  and  will  depend 
upon  the  condition  I  have  stated,  —  the  more  or  less  rapid 
depreciation  of  our  currency  as  compared  with  the  curren- 
cies (convertible,  like  ours,  into  gold)  of  other  countries. 
Whether,  the  conditions  of  production  remaining  unaltered, 
the  depreciation  be  indicated  by  a  corresponding  advance  of 
prices,  or,  those  conditions  undergoing  improvement,  the 
fall  in  the  value  of  gold  merely  operates  in  neutralizing,  as 
regards  price,  the  effects  of  the  cheapened  cost  of  commodi- 


THE  NEW  GOLD. 


283 


tics, —  in  cither  case  the  (/old  price  of  the  products  of  .English 
I'lfior  and  ahtttincnce  will  rine.  A  given  exertion  of  English 
industry  will  reap  a  larger  r/old  reward  than  before;  and 
fiirt'ign  commodities  not  rising  in  price  in  the  same  degree, 
the  larger  gold  reward  will  indicate,  over  so  much  of  our 
expenditure  as  is  directed  to  foreijn  productions,  a  real  aug- 
nientation  of  well-being.  As  regards  that  portion  of  our 
expenditure  which  falls  upim  the  products  of  our  own  indus- 
tiT,  individuals  and  classes  will,  according  to  cireum- 
Btanecs,^  be  benefited  or  injured  by  the  change;  but  as  a 
nation,  we  shall  neither  gain  nor  lose,  since  here  the  in- 
creased cheapness  of  gold  will  be  exactly  neutralized,  either 
by  a  corresponding  advance  in  price,  or  by  the  j)revention  in 
the  same  degree  of  a  fall  which  would  otherwise  have  taken 
place.  It  is  in  this  way,  by  the  increased  command  which 
she  obtains  over  foreign  markets  by  her  cheap  gold,  —  and 
not,  as  is  commonly  supposed,  by  finding  an  outlet  for  her 
wa: . .  in  California  and  Australia,  that  England  will  benefit 
by  the  gold  discoveries.  That  outlet  for  her  productions,  — 
were  the  movement  to  stop  here,  —  however  it  might  benefit 
indiviiluals,  would  for  the  country  at  large  bo  an  injury  and 
not  a  boon ;  it  Avould  deprive  her  of  that  which  might  con- 
duce to  her  comfort  and  happiness,  and  would  give  her  a 
"  breed  of  barren  metal "  in  exchange.  But  the  movement 
does  not  stop  hero.  The  money  which  she  obtains  from  the 
gold  countries,  instead  of  absorbing,  like  India  or  China,  she 
employs  in  purchasing  the  goods  of  other  nations.  It  is  in 
the  enlarged  command  which  she  acquires  over  such  goods 
that  her  gain  consists,  and  it  is  thus  that  she  indemnifies 
herself,  though  at  the  expense  of  the  nations  who  ultimately 
i^etain  the  new  gold  for  the  loss,  the  indubitable  loss,  which 
she  is  called  on  in  the  first  instance  to  sustain. 


,4"!l 


i 


iii! 


.»^: 


'  On  this  point  see  Cairnes,  p.  147,  et  seq. 


284 


ECONOMIC  HISTORY. 


XI. 


FRANCE  SOUS  LE  SECOND  EMPIRE, 


I 


l^ 


«i 


*  ! 


in 


i 


From  Levasseur's  IIistoire  des  Classes  Ouvuieres  en  France 
DEPUis  1789,  jusqu'a  nos  jouks.^     Vol.  ii.  pp.  307-321. 

T^EPUIS  qiiinzc  ans,  trois  grand  faits  (jconomiques  ont 
-'--'  exercd  eu  Fi-ance  unc  influence  considerable  sur  la 
production  manufacturiere ;  le  ddvcloppemcnt  du  crddit,  la 
multiplication  des  cliemins  de  fer  ct  la  rdformc  douaniere. 

11  cntrait  dans  les  vues  du  gouvcrnement  de  provoquer 
I'esprit  d'cntrcprise.  L'annde  1852  vit  se  former  deux  dtab- 
lissemcnts  d'une  nature  tres-diverse,  mais  qui  tons  deux  de- 
vaient  concourir  au  memo  but,  celui  de  fournir  des  capitaux 
au  travail :  Ic  Credit  foncier,  et  le  Credit  mobilier. 

Le  premier,  depuis  longtemps  rdclam^  par  M.  Wolowski, 
se  proposait  do  vcnir  en  aide  a  I'agriculture  en  avan^ant  sur 
premiere  hypotheque  .^  la  propridt(3  fonciere  des  sommes  rem- 
boursablos  par  annuitds ;  en  r<;alitd,  Ics  prets  agricoles,  qui 
augmentent  aujourd'hui,  ont  ^i6  les  plus  lents  ^  se  d^velopper, 
et  la  nature  de  sa  clientele  I'a  fait  servir  plus  a  la  construc- 
tion des  maisons  et  aux  travaux  publics  dans  les  communes 
qu'a  la  culture  proprement  dite :  a  ce  titre,  il  appartient  a 
riiistoirc  de  I'industrie.  Le  second,  crdd  et  dirig^  par  M.  E. 
Pdreirc,  est  uno  puissante  banque  de  commandite  et  de  sp<ic- 
ulation,  non  sans  analogic  avcc  celles  que  recommcndait  le 
saint-simonisme.  II  <;tait  destind  par  ses  statuts  a  fonder  on 
&,  soutcnir  de  grandes  entreprises,  et  il  a,  en  effet,  donnd  nais- 
sance  aux  cliemins  de  fer  du  Midi,  ^  la  compagnie  immobiliere 
de  Paris,  au  gaz  de  Marseille,  aux  paquebots  transatlantiques ; 
il  devait  etre,  en  raison  meme  de  son  caractere,  tres-vivement 


1  Paris :  Libraire  de  L.  Hachette  et  Cie,  1867. 


mm». 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


285 


affectd  par  toutes  les  influences  de  hausse  et  de  baisse,  et  sa 
fortune  d(jpendait  eutiercment  de  I'habileti?  de  ses  directeurs. 

La  Banque  de  France,  dont  le  gouvernemcnt  avait  le  droit 
de  suspendre  le  privilege  en  1855,  fut  affranchie  de  cette 
crainte  et  autorisde  c\  faire  dcs  avanccs  sur  depot  d'actions  ct 
d'obligations  de  cliemin  de  fer :  ^  la  speculation  en  usa  large- 
ment.  Quelques  ann<;es  apres,  la  Banque  obtenait  par  une 
loi  la  prorogation  de  son  privilege  jusqu'en  1897,  aux  prix  de 
100  millions  pretds  h,  I'liltat  et  fournis  par  une  draission  de 
nouvclles  actions;  la  Banque  pouvait  dlever  le  taux  de  son 
escompte  au-dcssus  de  6  pour  100,  et  le  gouvernoment  pouvait 
exiger,  dix  ans  aprfis  la  promulgation  de  la  loi,  qu'cllo  eut  au 
moins  une  succursalc  par  d<jpartement.2 

"  Les  operations  de  la  Banque  se  sont  consid(jrablement 
am(jliordes,"  disait  le  gouvcrneur,  en  parlant  dc  la  situation  en 
1852 ;  "  le  commerce  et  I'industrie  ont  rcpris  leur  essor."  En 
effet,  le  montant  des  operations  s'(;tait  dlev^  d'un  milliard  et 
demi,  chiffre  de  1851,  ;\  deux  milliards  et  dcmi.  Le  produit 
des  impots  indirects  s'^tait  notablement  accru ;  la  rente  avait 
d^passd  le  pair ;  toutes  les  valeurs  dc  bourse  avaient  6t6  em- 
portdes  dans  le  meme  mouvement,  et  les  marchandises,  sous 
la  triple  impulsion  de  I'abondance  de  I'or,  d'une  consommation 
plus  active,  et  d'une  speculation  audacieuse,  encbdrissaicnt 
chaque  jour. 

Ce  fut  I'age  d'or  de  la  Bourse.  Londres,  qui  avait  etd 
dcpuis  le  commencement  du  siecle  le  principal  marchd  des 
capitaux  ct  des  grandes  entreprises  en  Europe,  cdda  le  pas  ^ 
Paris.  L'eian  dtait  tel  qu'il  permit  au  commerce  de  franchir 
le  cholera,  la  disette,  la  guerre  d'Orient,  et  ii  I'Etat  d'emprun- 
tcr  un  milliard  et  demi  sans  briser  le  'ossort  du  credit.  Les 
capitaux,  5,  peine  forrnds,  dtaient  absorbes ;  les  travaux  pub- 
lics, les  emprunts,  la  disette  ellc-meme,  tout  y  contribuait ; 
on  spdculait  ^  la  hausse,  ct  les  cours  s'dlevaient. 

Cependant  les  affaires  dtaient  devcnucs  plus  difficiles  en 
1856 :  le  gouvernemcnt  crut  utile  d'enrayer  lui-mcmc  la  sjkj- 
culation^  et  de  faire  une  loi  restrictive  sur  les  socidtds  en  com- 


■  -,& 
•  '<  'i 


^  Ddcret  du  28  mars,  1852. 

'  Voir  au  Mon.,  la  note  du  0  mars,  1850. 


«  Loi  du  9  juin,  1867. 


286 


ECONOMIC  HISTORY. 


M- 


mandite  par  actions.^  La  langueur  continua  cependant  en 
1857,  et  I'abondance  de  la  r<5colto  rendait  inevitable  la  baisse 
des  denrdes,  lorsque,  vers  le  mois  d'aout,  la  crise  dclata  avec 
violence  aux  Etats-Unis.  EUe  se  corarauniqua  I'apidement  ^ 
Londres,  h  Hambourg,  h  Paris.  Quoique  moins  rudcment 
dprouvde  que  ses  voisines,  la  France  vit,  comme  elles,  les 
sources  du  credit  tarir ;  la  sp(3Culation  dut  liquider,  et  I'ann^e 
1858  fut  marquee  par  une  baisse  g<3n<)rale  des  marcbandiscs^ 
et  par  un  ralcntissement  des  transactions. 

La  guerre  d'ltalie  qui  survint  I'ann^e  suivante,  et  ses  con- 
sequences qui  se  firent  scntir  jusqu'cn  18G2,  empecherent  les 
affaires  de  reprendre  leur  essor  jusqu'au  jour  oix  le  combat 
d'Aspromonte  fit  croire  a  la  consolidation  du  trone  de  Yictor- 
Emmanuel.  Les  cours  se  releverent  alors,  et  I'csprit  d'entre- 
prisc  se  ranima.  Mais  une  autre  cause  do  malaise  pesait 
deja  sur  le  marchd :  la  guerre  d'Amdrique  privait  I'Europe 
de  coton  ct  rdduisait  a  la  misere  les  districts  manufacturiers 
de  I'Angleterre  et  de  la  France.  Une  crise  mondtairc  s'en- 
suivit;  en  1864,  I'escompte  de  la  Banque  de  France  monta 
k  8  pour  100,^  et  le  gouvernement,  sollicitd  par  une  petition 
do  trois  cents  ndgociants  et  par  une  contrepdtition  de  la 
Banque,  ordonna  une  enquete  sur  le  regime  du  credit.  Cette 
crise  s'apaisait  a  son  tour,  lorsque  (iclata  la  guerre  du  Dane- 
mark,  puis  la  guerre  d'Allemagne.  Les  agitations  de  la  po- 
litique, dans  le  vieux  et  dans  le  nouveau  monde,  contrarient 
frdqucmmont,  dcpuis  dix  ans,  le  ddploiemcnt  pacifique  des 
forces  du  travail  marchant  a  la  conqucte  de  la  matiere. 

Une  villc  a  particuliercmcnt  souffcrt,  et  souffre  aujourd'hui 
plus  que  les  autrcs,  de  la  langueur  des  affaires  dont  se  plaint 
Ic  commerce.  Cost  Lvon,  dont  la  nombreuse  population 
ouvriere,  dependant  presque  tout  cntiere,  pour  sa  subsistance, 
d'unc  seule  industrie  de  luxe,  est  toujours  la  premiere  h 
s'affaisser  sous  le  coup  des  crises  et  la  dernierc  a  se  relever. 


'  Loi  du  17  jiiillft,  1850.  II  sVtait  form;-,  on  1852,  21  socict(?s  de  ce  genre  ; 
en  1853,  25 ;  en  1851,  :](> ;  on  1855,  18 ;  en  1850,  17.  II  s'en  forma,  en  1867,  6 ; 
13  en  1858,  et  12  en  1859. 

^  Voir,  sur  cette  crise,  la  Question  de  I'or,  par  E.  Levasscur. 

^  Au  niuis  de  niai. 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


287 


Elle  avait  d^veloppd  ses  relations  extdrieurcs;  la  guerre 
d'Amdrique  lui  a  dtd  funeste;  de  84  millions  en  1858,  I'ex- 
portation  de  la  soierie  est  tombde  h  11  millions  en  1865.^  Le 
n:e'lleur  remedo  pour  elle  serait,  k  cotd  de  son  industrie  de 
luxe,  souraise  aux  caprices  de  la  mode  et  aux  variations  de 
la  fortune,  la  creation  d'une  industrie  commune  ayant  un 
large  ddbouchd. 

Ndanmolns,  malgr<?  les  obstacles,  le  travail  a  brillamment 
deploy<5  ses  forces.^  La  Banque  de  France,  dont  les  cscomptes, 
a  Paris,  avaient  une  seule  fois  atteint  1,329  millions,  sous  le 
regne  de  Louis-Philippe,  atteignit  de  nouveau  et  depassa  ce 
chiffre  en  1856;  en  1865,  elle  faisait  2,458  millions.  Elle 
etait  alors  dcvenuc  la  seule  banque  d'dmission  et  la  rdgula- 
trice  souveraine  du  credit  en  France ;  les  operations  de  ses 
succursales,  jointes  au  chiffre  des  affaires  de  Paris,  formaient, 
h  la  mOme  dpoque,  un  total  de  7,422  millions,  tandis  qu'en 
1847  les  banques  d<;partementales  et  la  Banque  de  France 
n'atteignaient  que  2,075  millions.  Dans  le  memo  temps,  sans 
que  le  commerce  des  banques  privdcs  parut  diminuer,''  se  fon- 
daient  d'autres  grands  <jtablissements,  comme  la  Socidtd  gcnd- 
rale  de  credit  industriel  et  commercial,*  la  Socidtd  de  dcpOts 
et  do  comptes  courants,^  la  Socidtd  gdndralo  pour  favoriser 
le  commerce  et  I'industrie  en  France.^  L'usage  des  cheques, 
antromont  dit  I'habitude  de  ddposer  en  banque  ses  fonds  de 
caisso  et  de  faire  ses  paiements  en  mandats,  commence,  quoique 
trop  lenteraent,  h  se  naturaliser  en  France  et  h  mcttre  une  plus 
graudc  masse  de  capitaux  h  la  disposition  du  credit. 

Parmi  les  entreprises  qui  devaient  obtenir  la  favour,  les 
chemins  de  fer  dtaient  au  premier  rang.  On  avait  souvent 
reprochd  a  la  France  dc  s'ctrc  laissd  devancer  par  ses  voisins, 
et  I'activitd  imprimde  aux  constructions  durant  la  scconde 
moitid  du  regno  de  Louis-Philippe  par  la  loi  de  1842,  s'dtait 


'•'Jj 


.1 


cir 


1  Lettre  de  M.  Aries  Diifour  a  I'Opininn  nntionale  du  18  octobre,  1866. 

2  Le  progrcs  des  impots  indirccts,  qui  a  continue  en  18Rrt,  est,  avec  le  progrfes 
du  comnieree  exte'rieur,  une  preuve  que  la  sitimtion,  considtTco  dans  son  ensem- 
ble, n'a  pas  empird  depuis  un  an,  malgre  la  langueur  des  affaires  dans  direrses 
industries. 

'  On  pre'tend  toutefois  qu'il  n'augmente  pas.  *  7  inai,  1859. 

«  6  juillet,  1863.  «  4  mai,  1864. 


r 


288 


ECONOMIC  HISTORY. 


Vd 


amortie  sous  la  R^publique.  Le  nouveau  gouvernement  la 
ranima.^  Lcs  capitaux  dtaiont  confiants.  On  en  profita  pour 
inaugurer  un  autre  mode  de  concession.  A  la  construction 
de  la  voie  par  I'fitat,  on  substitua  la  construction  par  les 
compaguies  que  Ton  encouragea  par  une  longue  jouissance ; 
les  baux,  avec  les  nouvelles  compagnies  et  meme  avec  les 
ancienncs,  furent  la  plupart  pass^ss  ou  revisds  pour  quatre- 
vingt-dix-neuf  ans.^  On  engageait  sans  doute  un  plus  loin- 
tain  avenir;  mais  on  faisait  immddiatement  pescr  toute  la 
charge  sur  les  capitaux  appelds  k  recueillir  les  bdndfices  les 
plus  directs  de  Tentrcprise ;  la  combinaison  dtait  dvidcmment 
prdfdrable.     Elle  n'cut  pas  dtd  possible  dix  ans  plus  tot. 

Les  concessions  multiples,  cr(jant  des  int(jrets  divers  et 
parfois  hostiles  sur  un  meme  parcours,  dtaient  un  obstacle  ^ 
la  circulation.  On  lcs  r<3unit,  de  manicre  a  former  de  vastes 
compagnies  qui  se  partagerent  le  domaine  du  rdscau  f  ranqais  : 
ce  ne  fut  pas  sans  quelques  tatonnements  qui  fournirent  des 
armcs  &,  la  speculation.^  Mais  dans  I'espacc  de  la  premicjre 
annde,  3,000  Ivilomotrcs  trouvaient  des  concessionnaires ;  et, 
h,  la  fin  do  la  quatriome  annde,  sur  une  longueur  d'cnviron 
5,000  kilometres,  les  trains  circulaicnt. 

Les  grandes  arteres  dtaient  dcssindcs  et  allaicnt  se  terminer 
en  pen  d'anndcs.  Lc  gouvernement  rdsolut  hardimcnt  d'abor- 
der  la  construction  des  lignes  secondaires  et  do  faire  pdndtrer 
'  vie  commcrciale  dans  tout  le  corps  do  la  nation,  comme  les 
petits  vaisseaux  font  pdndtrer  le  sang  jusqne  dans  les  chairs 
de  rhomme.  Ccttc  fois,  le  profit  ne  scmblait  pas  pouvoir  de 
longtcmps  rdmundrer  la  ddpcnse  et  d'aillcurs  la  crise  de  1857 
avait  rendu  plus  timides  les  entreprises.  Lc  gouvernement 
intervint,  et,  par  deux  lois  successives,*  donna  des  subventions 

1  Le  cliemin  de  cointurc  avuit  6t&  terete  d&s  le  11  Jecembre  1851.  Dans  la 
seule  anneo  1852,  40  docrets  furont  rendus  relativement  aux  chemins  de  fer,  et 
207  kilom.  fiircnt  livri's  a  la  circulation. 

2  Les  concessions  c'tnicnt  faitos  pour  99  ans,  avec  garantie,  pour  le  capital 
engage  par  les  Compagnies,  d'un  minimum  d'interut  do  4%  pendant  la  moitie'  de 
CO  temps.  Quelques  concessions  furent  meme  faitos  sans  garantie.  Cette  ga- 
rantie  fut  d'ailleurs  supprimde  pour  le  premier  reseau,  lorsque  la  loi  du  11  juin, 
1859,  accorda  une  garantie  particulibre  au  second  rc'seau. 

3  De'crets  du  17  Janvier,  in  fevrier,  20,  27  mars,  1862. 
«  Lois  du  11  juin,  1859,  et  du  11  juin,  1863. 


%-ii 


n'*;! 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


289 


ou  garantit  aux  capitaux  du  second  rdscau,  lesqucls  devaient 
etre  fournis  par  dcs  obligations,  un  intdrfit  do  4  pour  100  et  I'a- 
mortissemcnt  eu  cinquante  ans. 

C'est  ainsi  qu'^  la  fin  de  I'annde  1866,  la  longueur  totale 
dcs  concessions  definitives  atteignait  21,050  kilom.,  ct  cello 
dcs  lignes  exploitdes,  14,500 ;  la  d(;penso  faite  s'^jlevait  a  pres 
do  7  milliards.^ 

Lcs  canaux,  quoiquo  reldguds  au  second  plan,  ont  6t6  ter- 
minals sur  phisieurs  points,  entrepris  sur  quelqucs  autres,^  et 
sont  rentr(5s,  pour  la  plupart,  dans  le  domaine  do  rEtat,^  qui 
s'est  empresse  d'abaisser  presque  partout  les  droits  au  niveau 
des  frais  d'cntretien.  La  navigation  des  rivieres  a  6t6  amd- 
liorde.*  Les  grandes  routes,  paralleles  aux  voies  de  fer,  se 
trouvaicnt  ddlaissdcs  ;  mais  les  routes  transversales,  emportant 
ou  apportant  voyageurs  et  marchandiscs,  que  lcs  trains  rc- 
cueillent  ou  sement  sur  leur  route,  s'animaient.^  On  a  en 
consequence  redoubld  do  zele  dans  I'application  de  la  loi  do 
1836  sur  les  chemins  vicinaux,"  et  une  loi  nouvelle  a  encou- 
ragd  les  conscils  gdndraux  c\  construire,  aux  memos  conditions, 
dcs  chemins  de  fer,  qui,  ii,  I'exemple  de  ceux  dc  I'Alsace,  for- 
meront  un  troisicmc  rdsoauJ 

La  tdldgraphie  dlectrique,  qui  dtait  k  ses  ddbuts  en  1851, 
a  commencd  k  envelopper  de  son  rdseau  la  France,  k  la  suite  du 


'4 


1  On  se  rappelle  qu'h  la  fin  du  r&gue  de  Louis-Philippe,  la  dopenso  efEectue'e 
I'tait  d'environ  1  milliard  J,  et  le  noinbre  de  kilometres  -xploitos  de  1830. 

-  La  France  possedait  4,200  kilom.  de  canaux  en  i818,  et,  en  1800,  4,500; 
de  plus,  0,900  kil.  de  rivieres  navigables.  De  grands  travaux  ont  ete'  poursuivis. 
Voir  Erp.  de  la  sit.  de  I'Emp.,  1807,  Mon.,  p.  450  et  451. 

»  Ddcret  du  Janvier,  1852,  et  loi  du  28  jtiillet,  1800. 

*  Voir,  entre  autres,  la  loi  du  14  juillet,  1861. 

6  De  1848  ?i  18G0  exclusivement,  I'fitat  a  dispense'  pour  routes,  canaux, 
ponts,  phares,  etc.,  G"27  nullions. 

"  Rclativemcnt  aux  chemins  de  fer,  routes,  canaux,  etc.  M.  P.  Boiteau. 
Voir  Fortune  puhlique  et  ^finances  de  la  France,  t.  I.  Le  chemins  vicinaux  ont 
cofttL'  en  1860,  120  millions,  dont  un  tiers  en  prestations,  en  nature. 

">  C'est  en  1850  et  1860  que  le  conseil  gcne'ral  du  Bas-Rliin,  M.  Migncret 
e'tant  pre'fet,  classa  les  premiers  chemins  de  ce  genre.  —  La  loi  rendue  sur  la 
matifere  est  du  12  juillet,  1805.  Deux  dc'partements  (Euro,  Saone  et  Loire),  inde'- 
pendamment  du  Haut  et  du  Bas-Rhin  ont  de'jii  entrepris  des  chemins  de  ce 
genre.  29  autres  departenients  ont  de'cide'  en  principe  des  creations  du  mdme 
genre. 

19 


i4t 


290 


ECONOMIC  HISTORY. 


r 


II 


d<jcret  du  6  Janvier,  1852 ;  elle  couvre  anjourd'hui  I'Europc;^ 
elle  fait  communiquer  lea  deux  mondes  ct  transmet,  en  France 
sculcment,  pres  do  trois  millions  do  d(ipeclies  pour  le  compte 
des  particuliers.^  La  podte,  dont  le  service  a  requ  ^  diverges 
reprises  de  notables  ameliorations,  transportait  trois  fois  plus 
de  lettres  ou  d'imprim^s,  en  1865  qu*en  1847  ;3  de  nombreuses 
conventions  postales  et  des  conventions  mondtaires  ont  dtd 
signdes  avec  les  pays  voisins.*  Les  regions  lointaincs  de  I'Asie 
et  de  I'Amdi'ique  ont  6i&  miscs  en  relations  rdgulieres  avec 
nos  ports  par  la  Compagnie  des  mcssagcries  impdrialcs,  qui 
s'est  habilcment  transformde  devant  la  concurrence  des  chc- 
mins  do  for,  et  par  la  Compagnie  des  paquebots  transatlan- 
tiques  dont,  vingt  ans  auparavant,  un  ministre  aurait  ddji\ 
voulu  doter  la  France.^ 

Les  hommes,  leurs  pcnsdes  et  leurs  produits  circulent  an- 
jourd'hui en  beaucoup  plus  grande  nombre,^  avec  plus  de 
rapiditd  et  &.  moins  de  frais :  cette  mobility  qui  a  sensiblcment 
modifie  I'dconomie  de  la  vie  privde,  ct  qui  modifie  les  rapports 
des  nations,  restera  un  des  caracteres  distinctifs  de  la  scconde 
moitid  du  dix-ncuviome  siecle. 

Avec  de  pareillos  conditions,  le  commerce  extdricur  no 
pouvait  manquer  de  s'accroitre.     En  1850,  dpoque  ^  laquclle 

1  Grace  a  la  convention  tdle'grapliique  du  17  mai,  1805,  "lerc'seau  tek'gra- 
phique  du  continent  europeen  est  adjourd'liui,  dans  toutes  scs  parties  sans  excep- 
tion, soumiskdes  principes  etudes  regies  unifonncs."  Exp.  de  la  sit.  de  I'Einp., 
1807. 

*  2,307,091  do'pC'ches  dans  les  10  premiers  mois  de  1806,  ce  qui  suppose  c  vi- 
ron  2,480,000  pour  I'anne'e.  Au  1"  dec,  1800,  il  y  avait  2,091  bureaux  tcL.gra- 
pliiqucs.  Des  lignes  souterraines  ont  c'te  ctablies  dans  quelques  grandes  villcs 
et  des  fils  d'un  diametre  supc'rieur  sur  les  princlpales  lignes  pour  prc'vcnir  les 
interruptions  do  service. 

»  En  1847,  210  millions;  en  1805,  590  millions. 

<  La  convention  monetaire  du  23  dec,  1805,  a  e'tabli  une  monnaic  uniforme 
f  inais  critiquable  a  certain  c'gard)  entre  la  France,  la  Belgique,  la  Suisse,  I'ltalic, 
ct  commence  a  constituer  ce  que  M.  de  Parieu  nomme  le  Miinzverdn  latin. 

*  Plusieurs  autres  services  ont  e'te  e'tablis,  Exp,  de  la  sit.  de  I'Emp.,  1807. 

*  Le  nonibre  des  voyageurs  des  cliemins  de  fer  e'tait  dc  37  millions  en  1857, 
de  84  millions  en  1860.  Dans  cette  derniere  annee,  les  84  millions  de  voyageurs 
ont  fait  3,301  millions  de  kilombtres,  et  34  millions  de  tonnes  ont  fait  5,171  mil- 
lions de  kil.  Le  produit  brut  a  etc'  de  184  millions  do  francs  pour  les  voyageurs 
et  de  314  millions  pour  les  marchandiscs.  Depuis  1855,  le  prix  moycn  kilomc'- 
trique  du  transport  de  la  tonne  a  baissd  de  0  fr.  a  1,117. 


FRANCE   SOUS  LE  SECOND  EMPIRE. 


291 


il  avait  h  peu  pres  retrouv^  le  niveau  do  I'annde  la  plus  pros- 
pere  du  rogno  de  Louis-Philippe,  il  <}tait  de  2,555  millions. 
En  1864,  il  s'dlcvait  h  7,329  millions,  c'cst-a-dire  qu'il  a  pres- 
que  tripl(j  dans  I'espacc  de  quinzo  ana. 

Si  Ton  prend  la  moycnne  de  chacun  des  trois  lustres  qui 
composont  cctte  pdriode,  on  constate,  non-seulement  un  pro- 
gres,  raais  une  progression  constante,  h  n'cnvisagcr  que  les 
marchandises  import<jes  ou  exportdcs  au  commerce  spdcial. 
La  moycnne  de  1850-1854  est  de  2,294  millions ;  ccllc  de 
1855-1859,  de  3,626  millions,  et  ccllc  de  1860-1864,  pdriodc 
pendant  latiucUc  Tabaissement  des  tarifs  fran^-ais  a  provoque 
la  concurrence  (jtrang^re,  de  4,701  millions  et  le  progrcs 
continud.* 

II  a  6t6  plus  rapide  qu'aux  deux  <;poques  prdcddentes  de 
notro  histoirc  contemporainc.  Diirant  les  quinzo  anndes  de 
la  Rcstauration,  notre  commerce  extdrieur  avait  h  pen  pres 
doubl<j ;  durant  les  dix-sept  anndes  du  regno  de  Louis-Phi- 
lippe, il  avait  fait  un  peu  plus  quo  doubler.2 

Ce  progres  ticut  k  des  causes  gdnd rales  et  n'cst  pas  un 
privilege  particulier  k  la  France.  Dans  les  dtablisscmcnts 
de  crddit  c'est  elle  qui  a  donnd  des  exemples  k  une  partie  de 
I'Europc,  mais  elle  n'a  fait  que  suivre  k  distance  rAngletcrre ; 
dans  la  construction  des  chemins  de  for,  elle  avait  dtd  devan- 
cde  par  plusieurs  Etats.  Cependant  aucune  nation,  la  Bel- 
gique  exceptde,^  n'a,  depuis  quinzo  ans,  plus  largemcnt  que 
la  France,  dtcndu  ses  relations  extdrieures.     Pendant  qu'elle 

1  Ccs  cliiffres,  il  est  vrai,  sont  ccux  des  valeurs  actuclles,  c'est-ii-dire  des  prix 
du  marclie,  et,  conime  la  valciir  de  rarpcnt  a  diminue,  ils  ne  represcntent  pas 
une  qiiantite'  triple  do  marcliandises.  L'unnee  18t)5,  dont  on  ne  connait  encore 
que  le  commerce  spo'cial,  a  produit  5,081  millions,  I'annc'e  18G0  produira  environ 
(),300  millions  (a  produit  f),;i08  millions  pour  les  10  premiers  mois) ;  le  com- 
merce special  de  18t>4  etait  de  6,452  millions.  La  naviijation  s'est  accrue 
connne  le  reste ;  12,531,504  tonnes  en  1854;  17,(i.')8,000  tonnes  en  1800.  La 
principale  augmentation  a  etc'  pour  les  ports  de  Marseille,  du  Havre,  et  de 
Monleaux. 

'^  lin  1816  (tr&s-mauvaise  annce  d'ailleurs),  621  millions;  en  18.']0,  1,211  mil- 
lions; en  1847,  2,437  millions. 

3  Belgique,  en  1835,  358  millions  de  francs,  et,  en  1847,584;  en  1850,618 
millions,  et,  en  1804,  2,432  millions ;  ce  qui  fait  environ  500  fr.  par  habitant. 
En  France,  la  proportion  n'est  pas  tout  a  fait  de  200  fr.  par  habitant.  Elle  est 
en  Angleterre  de  360  fr. 


im 


■'    ■CI 


«'   i 


292 


ECONOMIC  HISTORY. 


cn  triplait  Ic  chiffro,  la  plupart  dcs  pa3's  commcrqants,  ct 
rAngloterro  cn  particulicr,  doublaicnt  soulemcut  Ic  leiir;  il 
est  juste  do  notcr  toutefois  que  ce  doublement,  en  Angleterre, 
portuit  son  chiffre  h,  11  milliards.^ 

II  rostc  il  dire  quelles  lois  ont  favorisd  cettc  extension  du 
commerce  et  rdgissent  aujourd'hui  le  travail. 


V!i. 


LES  TRAITfiS  DE  COMMERCE. 

Qiiclques  jours  aprcs  la  proclamation  de  I'Erapire,  le  sdnav 
tus-consulte  du  25  doccmbrc  1852  interprdtait  et  dtcndait  les 
prdrogatives  du  souverain  en  matiere  dc  traitds  de  commerce, 
en  ddelarant  qu'ils  auraicnt  "  force  de  loi  pour  les  modifica- 
tions do  tarif  qui  y  sont  stipulees,"  e'cst-tVdiro  que  le  Corps 
Idgislatif  n'aurait  plus  le  droit  de  les  ratifier  ou  de  les  annulcr 
par  son  vote.  Ce  pouvoir,  remis  au  chef  dc  I'Etat,  jjouvait, 
en  dehors  dcs  considdrations  politiqucs,  inquidter  certains 
intdrots ;  le  prdsidcnt  du  Sdnat,  dans  son  rapport,  s'appliqua 
a  les  rassurer  en  se  pronongant  centre  les  thdorics  de  la  libertd 
commcrciale. 

Cepcndant  la  rdcolte  de  1853  fut  mauvaise.  L'importation 
seule  pouvait  combler  le  deficit.  Le  gouverncment,  pour  I'en- 
courager,  n'hdsita  pas  a  abaisser  toutes  les  barrieres  de  la 
douanc ;  il  ddcrdta  la  suspension  de  I'dchelle  mobile,^  I'exemp- 
tion  du  droit  de  tonnage  et  de  la  surtaxe  de  pavilion  pour  les 
navires  chargds  de  substances  alimcntaires,'^  I'abaisscment  du 
droit  sur  les  bestiaux.*  Ce  n'dtaicnt  que  dcs  mcsures  tempo- 
raires ;  mais  elles  semblaient  indiquer  un  esprit  nouveau. 

'  En  1854  (prcniii-re  .innr'e  oii  la  stafistique  ait  donne  les  valours),  268  millions 
(le  livrcs  sterling;,  et,  cn  18()-t,  4;>5  inilliuns  (soit  environ  10  milliards,  000  mil- 
lions). En  18150,  imc  statistique  angiaise  {voir  les  Anuales  du  commerce  extericur) 
donnait  120  millions :  il  y  aiirait  done  eu  li  pou  pros  doublement  de  1830  ii  1850. 
I'ays-Bas,  en  18;VJ,  471  millions  de  franes;  en  18-50,  1,079;  en  1804,  1,1104. 
IJussie,  en  1850,  102  millions  de  roubles;  cn  1863,  300  millions.  £tats-Unis,  cn 
18IU,  environ  184  millions  de  dollars  ;  en  1861,  412  millions  en  18(50,  702 
millions. 

'^  Di'cret  du  18  aout,  1853.  Cetto  re'forme  c'tait  alors  doniandec  par  le  conscil 
municipal  de  Marseille  ct  par  le  conseil  genc'ral  de  I'lIcTault  que  prcsidait  M. 
Michel  Chevalier. 

«  Dec.  du  8  aofit,  1853. 

*  Dec.  du  14  scptenibrc,  1853.  —  Les  droits  sur  boeufs  et  taureaux  dtaient 
rdduits  dc  50  fr.  k  3  fr. 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


298 


Dans  los  deux  camps  opposes  on  s'einut.  M.  Jean  Doll f us 
cntropi'it  unc  campagnc  contro  la  prohibition  tics  lils  do  coton. 
Lq  ddbat  fut  portd  successivcmont  dovant  la  Socidto  indiis- 
triellc  dc  Mulhouse,  devant  Ic  Consoil  snperiour  du  conimcrcc, 
et  dans  Ic  cabinet  de  I'Enipcreur:  M.  Dollfus  attaqua,  M.M. 
Fcray  d'Essonne  et  Seilliere  ddfcndirent  le  systOme  protocteur. 
Le  tarit'  dcs  cotons  no  subit  (ja'ane  modification  l(!gere  ;^  niais 
ddji\  un  d(jeret,  plus  signilicatif,  changcait  les  zones  d'entreo 
pour  la  lionillc  et  diminuait,  de  raoitid  environ,  le  droit  sur 
les  fcrs.'^  Deux  ans  apres,  nouvcUe  rdduction,  et,  commc  con- 
sequence, abaissement  du  droit  sur  le  fer-blanc,  le  fil  do  for,  la 
vicillc  ferraille,  et  les  macliines.^  L'annde  1855  dtait  marqudc, 
en  outre,  par  lo  retranchement  de  pros  de  200  articles  sans 
importance,  tels  que  les  yeux  d'dcrevisse  on  le  gui  do  chono, 
(pii  allongeaient  le  tarif  sans  profit  pour  le  Trdsor,''  et  par 
une  diminution  importantc  du  droit  sur  les  laines  et  les  peaux 
brutes.^  La  tendance  du  gouvernement  s'accusait  avec  plus 
de  nettet^. 

L'Exposition  universclle  de  Paris  vcnait  d'avoir  lieu  et  I'in- 
dustrie  fran^aisc  y  avait  brilld  au  premier  rang  parmi  les 
nations.  Dans  le  but  d'dpargncr  aux  exposants  (strangers  1^ 
la  couteusc  ndcessitd  de  rcmporter  lours  produits,  et  peut-otrc 
aussi  dc  tenter  une  experience,  le  prince  Napoleon,  president 
dc  la  Commission,  avait  fait  decider  quo  tous  les  objets  ex- 
poses, qu'ils  fnssent  prohibds  on  non,  pourraient  etre  vondus 
et  admis  exceptionnellcmcnt  en  Franco  en  payant  un  droit  de 
22  p.  100.*'  Or,  sur  un  total  d'cnviron  22  millions  de  ricliesscs 
etrangeres,  qui  avaient  6t6,  pendant  i)lusieurs  mois,  <jtal(;es 
sous  les  yeux  d'un  public  si  nombrcux,  2  millions  |  seulcment 
avaient  trouvd  dcs  achetcurs  frangaisj  L'industrie  fran(;aiso 
n'dtait  done  pas  aussi  incapable  de  lutter  contro  la  concur- 
rence du  dehors  que  le  proclamaient  les  parties  inttjressees. 

»  Voir  le  decret  du  28  ddccnibre,  1853. 

*  l><?c.  du  22  novembre,  1853.  —  La  diminution  sur  I'acier  fondu  dtait  mGme 
beaucoup  plus  forte .  de  132  fr.  k  3  fr. 

a  De'c.  du  septembre,  1855.  *  Dec.  du  16  juillet,  1855. 

*  Dec.  du  17  Janvier  et  du  10  docembre,  1855. 
6  Dec.  du  6  avril,  1854. 

'  Voir  Journ.  des  Econ.,  2«  serie,  t.  xi.  p.  471. 


4 


it'] 


294 


ECONOMIC  HISTORY. 


r«U 


V( 


'•  L' observation  qui  m'a  frnppd  tout  d'aboril,"  disait  le  prince 
Napoldon  dans  son  rapport,  "c'cst  quo  do  ces  grands  concoura 
jaillit  unc  fois  do  jUus  la  i)rouve  que  les  socidtds  nioderncs 
murchent  vers  la  libertd."  D(jji\  le  gouvernenient,  ddsireux  de 
ddveloppcr  "  les  relations  internationales  qui  prdparent  lo 
progrcs  de  la  civilisation,"  avait  prdsentd  au  Corps  Idgislatif 
"  un  j)rojet  levant  toutes  les  prohibitions."  Pour  la  prcmiiirc 
fois  peut-etre,  il  avait  rencontrd  uno  resistance  qui  I'avait 
d'autant  plus  dtonnd  qu'elle  dtait  [)lus  rare  et  qu'cllo  cherchait 
h  prendre  son  point  d'appui,  liors  de  Tasscmblde,  dans  I'agita- 
tion  des  villes  raanufacturieres.  11  retira  le  projct,  en  annon- 
<;ant  qu'une  nouvelle  loi  dtait  inise  a  Tdtude,  et  que  la  levde 
des  prohibitions  n'aurait  lieu  qu'^  partir  du  1"  juillet,  1861. 
"  L'industrie  frangaisc,  prdvenuc  des  intentions  bien  arretdes 
du  gouvernenient,  ajoutait  le  3Ioniteur,  aura  tout  le  temps 
ndcossaire  pour  se  prdparer  i\  un  nouvcau  regime  commercial.* 

Durant  trois  ans,  le  silence  se  fit  sur  cette  grave  question.^ 
D'aillours  vers  la  fin  de  1857,  une  criso  terrible  avait  ddsar- 
gonnd  la  spdculation  et  fait  momentandment  refiner  en  baisse  le 
prix,  sans  cesse  montant  depuis  1852,  des  denrdes,  des  matidres 
premi(ires,  et,  par  suite,  des  objets  manufacturds ;  la  reprise  des 
travaux  avait  dtd  suspeudue  en  1859  par  la  guerre  d'ltalie. 

Le  commerce  commengait  h  peine  h  retrouver  son  dquilibre, 
lors(iue,  le  15  Janvier  18G0,  le  Moniteur  publia  la  lettre  que 
TEmpcreur  avait,  quelqucs  jours  auparavant,  dcrite  h  son 
ministre  des  finances.^  C'dtait  un  vaste  programme  dcono- 
mique  dont  le  but  dtait  "d'imprimer  un  grand  cssor  aux  di- 
verses  branches  do  la  richessc  nationale,"  et  que  son  auteur 
rdsumait  en  ces  termes  :  — 

"  Suppression  des  droits  sur  la  laine  et  les  cotons ; 

"  Rdduction  successive  sur  les  sucres  et  les  cafds  ; 

"  Amdlioration  dnergiquement  poursuivie  des  voies  de  com- 
munication. 

"  Rdduction  des  droits  sur  les  canaux,  ct,  par  suite,  abaissc- 
ment  gdndral  des  frais  de  transport ; 

1  Monitntr  du  17  octobro,  1856. 

*  Cepciidant  plusieurs  ddcrets  importants  furent  rondus. 

«  Lettre  du  5  Janvier,  1860. 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


295 


"  Prots  &  I'agriculturo  ct  ^  Tindustric  ; 

"  Suppression  des  prohibitioua  ; 

'•  Traitd  dc  commerco  avcc  Ics  puissances  dtrangdrcs." 

"  Par  COS  mcsurcs,"  ajoutait  rEmpercur,  "  I'agriculturo 
trouvcra  rdcoulemont  do  ses  produits;  I'industrie,  affranchio 
d'entravcs  extdrieures,  aiddo  par  lo  gouvcriicmcnt,  stimulde 
par  la  concurrence,  luttera  avantageuseraent  avcc  les  produits 
dtrangers,  ct  notro  commerce,  au  lieu  do  languir,  preudra  un 
nouvcl  essor." 

La  pensde  du  gouvernement,  sur  ce  point,  so  relcvait  tout 
entifire.  11  dtait  impossible  qu'issu  du  suffrage  univcrsel  ct 
ddgagd  des  liens  qui  avaient  arretd  ses  prdddcesseurs,  11  con- 
sentit  d  maintenlr  dans  son  intdgritd  Ic  systi^mo  prohlbitlf  quo 
los  gouvernements  prdcddents  cux-memes  n'avaient  crdd  ou  con- 
servd  aussl  rigoureux  quo  par  la  ndcessitd  do  compter  avcc  do 
puissantes  influences ;  mais  il  out  pu  so  faire  qu'un  autre  sou- 
vcrain  embrassat  moins  rdsolument  un  moins  vaste  ensemble. 
Quol  qu'il  en  soit,  depuis  le  ddcret  do  Berlin,  aucun  fait 
aussl  considerable  ne  s'dtait  produit  dans  I'histolro  do  notre 
legislation  douani^re. 

Ddji  dtaient  arretds  les  articles  du  plus  important  traltd  do 
commerce  quo  put  signer  la  Franco,  de  celui  qui  devait  la  Her 
^  sa  rlvale  la  plus  redoutde.  Le  hdros  de  la  llgue  anglaiso, 
Richard  Cobden,  et  M.  Michel  Chevalier,  qui,  depuis  1852, 
falsait  h,  chaque  session  du  Conscil  gdndral  de  I'Hdrault,  voter 
un  raanifcste  en  favour  do  la  llbertd  commerciale,  en  avaient 
eu  les  premiers  la  pensdo,  et  avaient  trouvd  des  disposi- 
tions favorables  dans  lo  ministcre  anglais  et  h.  la  cour 
des  Tuilcrlcs.  Au  lendemain  de  la  paix  de  Villafranca  et  i 
la  volllo  du  traitd  de  Turin,  TEmporour,  ddsireux  de  sorrer 
les  nocuds  pacifiqucs  de  la  Franco  et  do  I'Anglcterro,  approuva 
un  projet  qui  rdpondait  aux  bcsoins  de  sa  politique  extdrleure 
comme  ^  ses  vues  de  rdformcs  dconomiques,  et  d6s  la  fin  de 
novembre,  1859,  los  ndgociations  prdliminalres,  condultes  avec 
le  plus  grand  secret  par  M.  Rouher,  ministre  du  commerce,  et 
par  les  deux  dconomistes,  dtaient  termlndes.  Ce  fut  par  la 
lettre  du  6  janvler  quo  la  Franco  apprit  qu'oUe  eutralt  dans 
une  nouvelle  dro  industrlelle.  Lo  23  du  memo  mois,  le  traitd 
dtalt  signd. 


.  ;|ii 


296 


ECONOMIC  III  STORY. 


<  i 


Lc8  prohibitions  dtuiont  supprimdcs.  Lus  marchandiscs 
aiiglaisfs  eiitroraioiit  cii  Franco  on  payant  un  droit  ad  valorem, 
(iui  Bcrait  bioiitot  converti  en  droit  spdcilinno,  ct  qui  n'excddo- 
rait  pa8  30  pom-  100  au  d(!but,  25  pour  100  i\  partir  do  TaniK^o 
18G4.  La  (Jrando-Hrotaj^nc,  do  son  cot(),  admottait  en  ploino 
franchise  nos  produits,  ipii  payaient  oncoro  pour  hi  i»lupart  un 
droit  do  10  pour  100,  ct  no  prdlevait  plus  qu'uno  taxc  variable 
do  1  ik.  2  scholliugs  sur  noa  vins,  et  do  8  schellings  5  pence  sur 
nos  caux-de-vic.^ 

Lo  traitij  du  23  Janvier  dtait  un  typo  sur  lequol  on  so  propo- 
sait  de  reformer  toutc  notrc  legislation  douaniere,  ct  do  rtiglcr 
les  rapports  conunerciuux  do  la  France  avcc  scs  voisins.  Dcs 
ndgociations  furent  preaque  aussitot  cntanidcs  ;  ellcs  ont 
amend  la  conclusion  do  plusieurs  traitds,  d'abord,  avcc  la 
Bclgique,^  puis  avcc  la  Prussc  et  le  Zollvcrcin,"  puis  avcc 
ritalic  et  la  Suisse,'*  enlin,  en  1865  et  1860,  avcc  les  Pays-Has, 
Ics  villcs  hansdaticiucs,  le  Meclilembourg,  la  Suede,  I'Espagne, 
lo  Portugal,  le  Pdrou,  rAutrichc.'' 

Le  Cor[)8  Idgislatif  nc  fut  saisi  do  ces  rdformcs  qu'aprtis  le 
fait  accompli."  Get  usage  dcs  droits  confdrds  au  souverain 
par  le  sdnatus-consultc  du  25-30  ddcembre,  1852,  cut  lo  regret- 
table effct  do  donncr  a  unc  transformation  libdrale  rapparcnce 
d'un  coup  d'Etat  commercial,  et  preta  aux  partisans  do  la 
protection  lour  plus  solide  argument.  Lc  gouvcrnement  tint 
bon.  Dans  les  discussions  successivcs  qu'ont  amendes  les 
traitds,  il  s'est  appliqud  constamment  a  dtablir  dcs  droits  de 
plus  en  plus  moddrds,  afin  de  rendro  toujours  plus  faciles  les 
relations  intornationalcs,^  et  quoique  la  politique  ait  rendu 

'  Le  trait(5  portait  8  sch.  2  pcnuc;  mais  lc  taux  fut  trouvc  insuffisant  en 
Angleterre  et  portd  u  8  Bch.  5  p.  par  un  art.  addit.  du  20  fJvrier. 
2  10  niai,  1801. 
«  24  mars  et  2  aoflt,  1802, 10  mai,  1865. 

*  17  Janvier,  1804,  et  30  juin,  1804. 

»  7  juin,  1865,  11  mars,  1805,  9  juin,  1865,  4  et  30  juin,  18  juin,  1805,  11  juil- 
let,  1806;  2  de'c,  11  dec,  1800.  Voir  M.  Boiteau,  Les  TraiUs  de  commerce  et 
Exposifde  la  sit.  de  I'Empire.     {^fon.  de  janv.,  1866  et  de  fe'v.  1867.) 

*  La  discussion  sur  les  modifications  de  tarif  du  traite  du  23  Janvier  ne 
recommenfa  au  Corps  Ic'gislatif  que  le  28  avril. 

'  Ainsi,  par  exetnple,  les  moderations  de  droits  portc'es  dans  le  traite'  avec 
ritalie,  ont  dte,  par  dccret  du  20  Janvier,  1804,  appliqudes  k  la  Belgique  et  & 
I'Angleterre. 


hi\' 


vm  n 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


297 


vuinc  dumnt  pliusicura  ann(^e«  la  Convention  avcc  lo  Zollvcrcin, 
la  Franco  cummiiniquo  aujuui'iriiui  avec  toutcu  los  nations 
linutru|ihes  do  son  terrltoirc,  sans  rcncontror  rol)staclo  insur- 
uiontablo  do  la  prohibition,  et  suiis  avoir,  dans  la  niajorito 
dcs  cas,  i\  payor  autre  chose  qu'un  simple  droit  de  consoiunui- 
tion,  asscz  lc1;^or  en  I'ait,  ct  l<;gitinie  en  prineipe. 

Cea  traitda  avaient  fait  disparaitro  les  prohibitions.  Lo 
systtSino  protectenr  qu'cllea  dtayaient,  ct  dans  le{|iiel  do  si 
largos  brtichcs  dtaient  ouvertes,  devait  n(5ce8sairenient  crou- 
ler.  II  no  restait  au  Corps  legislatif  (pi'il  deblayer  lo  tcr- 
rnin  et  ii  rdtablir  riiarmonio  dans  les  diverscs  [)artie8  do 
notre  Code  douanicr,  en  votant  les  projets  que  lui  prdsentait 
lo  gouvernement.  .  .  . 


■'t'flii!: 


K'i 


im 


298 


ECONOMIC  HISTORY. 


xu. 

RECENT  CHANGES  IN  TRANSPORTATION  AND 
PRODUCTION, 


IV\         {■ 


hv     i 


From  Wells'  Recent  Economic  Changes,  pp.  27-65. 

WHEN  the  historian  of  the  future  writes  the  history  of 
the  ainetecnth  century  he  will  doubtless  assign  to  the 
period  embraced  by  the  life  of  the  generation  terminating  in 
1885  a  place  of  importance,  considered  in  its  relations  to  the 
interests  of  humanity,  second  to  but  very  few,  and  perhaps  to 
none,  of  the  many  similar  epochs  of  time  in  any  of  the  centu- 
ries that  have  preceded  it;  inasmuch  .is  all  economists  who 
have  specially  studied  this  matter  are  substantially  agreed  that, 
within  the  period  named,  man  in  general  has  attained  to  such 
a  greatei*  control  over  the  forces  of  Nature,  and  has  so  com- 
passed their  use,  that  he  has  been  able  to  do  far  more  work  in 
a  given  time,  produce  far  more  product  measured  by  quantity 
in  ratio  to  a  given  amount  of  labor,  and  reduce  the  effort  nec- 
essary to  insure  a  comfortable  subsistence  in  a  far  greater 
measure  than  it  was  possible  for  him  to  accomplish  in  any 
previous  generation.  In  the  absence  of  sufficiently  complete 
data,  it  is  not  easy,  and  perhaps  not  possible,  to  estimate  accu- 
rately, and  specifically  state  the  average  saving  in  time  and 
labor  in  the  world's  work  of  production  and  distribution 
+hat  has  been  thus  achieved.  In  a  few  departments  of  indus- 
i.'ial  effort  the  saving  in  both  of  these  factors  has  certainly 
amounted  to  seventy  or  eighty  per  cent ;  in  not  a  few  to  more 
than  fifty  per  ccnt.^    Mr.  Edward  Atkinson,  who  has  made 

1  According  to  tlie  United  States  Bureau  of  Labor  (report  for  1886),  the 
gain  in  the  power  of  production  in  some  of  the  leading  industries  of  the  United 
States  "  during  tlie  past  fifteen  or  twenty  years,"  as  measured  by  ttie  displace- 
ment of  the  muscular  labor  formerly  employed  to  effect  a  giren  result  (i.  e. 


CHANGES  IN   TRANSPORTATION. 


299 


(his  matter  a  special  study,  consldei's  one  third  as  the  mini- 
mum average  that  can  be  accepted  for  the  period  above  speci- 
fied.^ Other  authorities  are  inclined  to  assign  a  considerably 
higher  average.  The  deductions  of  Mr.  William  Fowler,  Fel- 
low of  University  College,  London,  are  to  the  effect  that  the 
saving  of  labor  since  1850  in  the  production  of  any  given  arti- 
cle amounts  to  forty  per  cent ;  ^  and  the  British  Royal  Com- 
mission (minority  repoi't,  1886)  characterizes  the  amount  of 
labor  required  to  accomplish  a  given  amount  of  production 
and  transport  at  the  present  time  as  incomparably  less  than 
was  requisite  forty  years  ago,  and  as  "  being  constantly 
reduced." 

But  be  this  as  it  may,  out  of  such  results  as  are  definitely 
known  and  accepted  have  come  tremendous  industrial  and 
social  disturbances,  the  extent  and  effect  of  which  —  and 
more  especially  of  the  disturbances  wliich  have  culminated. 


m 


e. 


amount  of  product)  has  been  as  follows  :  In  the  manufacture  of  agricultural 
implements,  from  fifty  to  seventy  per  cent;  in  the  manufacture  of  shoes, 
eigiity  pur  cent;  in  the  manufacture  of  carriages,  sixty-five  per  cent;  in  the 
manufacture  of  machines  and  machinery,  forty  per  cent ;  in  the  silk-manufac- 
ture, fifty  per  cent ;  and  so  on. 

1  In  a  print-cloth  factory  in  New  England,  in  which  the  conditions  of  pro- 
duction were  analy-sed  by  Mr.  Atkinson,  the  product  per  hand  was  found  by 
liim  to  liave  advanced  from  20,531  yards,  representing  3,382  hours'  work  in 
1871,  to  132,391  yards,  representing  2,095  hours'  work,  in  1884,  —  an  increase  of 
twenty-two  per  cent  in  product,  and  a  decrease  of  twenty  per  cent  in  hours  of 
labor.  Converted  into  cloth  of  their  own  product,  the  wages  of  the  operatives 
in  this  same  mill  would  have  yielded  them  6,205  yards  in  1871,  as  compared 
with  9,737  yards  in  1884,  —  an  increase  of  oCi''^  per  cent.  During  the  same 
period  of  years  the  prices  of  beef,  pork,  flour,  oats,  butter,  lard,  cheese,  and 
wool  in  the  United  States  declined  more  than  twenty-five  per  cent. 

A  like  investigation  by  the  same  authority  of  an  iron-furnace  in  Pennsyl- 
vania showed  that,  comparing  the  results  of  the  five  years  from  1860  to  1864 
with  the  five  years  from  1875  to  1870,  the  product  per  hand  advanced  from  776 
tons  to  1,219  tons;  that  the  gross  value  of  the  product  remained  about  the 
same ;  tliat  the  number  of  hands  was  reduced  from  seventy-six  to  seventy-one ; 
and  that  consumers  gained  a  benefit  of  reduction  in  price  from  $27.05  per  ton 
to  819.08. 

'■'  Wages  have  greatly  increased,  but  the  cost  of  doing  a  given  amount  of 
work  has  greatly  decreased,  so  that  five  men  can  now  do  the  work  which 
would  have  demanded  the  labor  of  eight  men  in  1850.  If  this  be  correct,  the 
saving  of  labor  is  forty  per  cent  in  producing  any  given  article.  —  Appreciation 
of  Gold,  William  Fowler,  Felloto  o/  Universily  College,  London,  1886. 


ni 


; 


Hl^C 


300 


ECONOMIC  HISTORY. 


as  it  were,  in  later  years  —  it  is  not  easy  to  appreciate  with- 
out the  presentation  and  consideration  of  certain  typical  and 
specific  examples.  To  a  selection  of  such  examples,  out  of  a 
large  number  that  are  available,  attention  is  accordingly  next 
invited. 

Let  us  go  back,  in  the  first  instance,  to  the  year  18G9,  when 
an  event  occurred  which  was  probably  productive  of  more  m- 
mediate  and  serious  economic  changes  —  industrial,  commer- 
cial, and  financial  —  than  any  other  event  of  this  century,  a 
period  of  extensive  war  excepted.  That  was  tlie  opening  of 
the  Suez  Canal.  Before  that  time,  and  since  the  discovery  by 
Vasco  da  Gama,  in  1498,  of  the  route  to  India  by  the  Cape  of 
Good  Hope,  all  the  trade  of  the  Western  hemispheres  with  the 
Indies  and  the  East  toiled  slowly  and  uncertainly  around  the 
Cape,  at  an  expenditure  in  time  of  from  six  to  eight  months 
for  the  round  voyage.  The  contingencies  attendant  u{)on  such 
lengthened  voyages  and  service,  as  the  possible  interrui)tion 
of  commerce  by  war,  or  failure  of  crops  in  remote  countries, 
which  could  not  easily  be  anticipated,  required  that  vast  stores 
of  Indian  and  Chinese  products  should  be  always  kept  on  hand 
at  the  one  spot  in  Europe  where  the  consumers  of  such  com- 
modities could  speedily  supply  themselves  with  any  article  they 
required ;  and  that  spot,  by  reason  of  geographical  position 
and  commercial  advantage,  was  England.  Out  of  this  condi- 
tion of  affairs  came  naturally  a  vast  system  of  wai'chousing 
in  and  distribution  froyn  England,  and  of  British  bani  ing  and 
exchange.  Then  came  the  opening  of  the  canal.  What  were 
the  results  ?  The  old  transportation  had  been  performed  by 
ships,  mainly  sailing-vessels,  fitted  to  go  round  the  Cape,  and, 
as  such  ships  were  not  adapted  to  the  Suez  Canal,  an  amount 
of  tonnage,  estimated  by  some  authorities  as  high  as  two  mil- 
lion tons,  and  representing  an  immense  amount  of  wealth, 
was  virtually  destroyed.^    The  voyage,  in  place  of  occupying 

1  "The  cnnal  may  therefore  be  snid  to  have  given  a  death-blow  to  sailing- 
vessels,  except  for  a  few  special  purposes."  —  From  a  paper  by  Charles  Mag- 
niac,  indorsed  by  the  "  London  Economist "  as  a  merchant  of  eminence  and 
experience,  entitled  to  speak  with  authority,  read  before  the  Indian  Section  of 
the  London  Society  of  Arts,  February,  1876. 


CHANGES  IN  TRANSPORTATION. 


301 


from  six  to  eight  months,  has  been  so  greatly  reduced  that 
steamers  adapted  to  the  canal  now  make  the  voyage  from 
London  to  Calcutta,  or  vice  versa,  in  less  than  thirty  days. 
The  notable  destruction  or  great  impairment  in  the  value  of 
ships  consequent  upon  the  construction  of  the  canal  did  not, 
furthermore,  terminate  with  its  immediate  opening  and  use  ; 
for  improvements  in  marine  engines,  diminishing  the  con- 
sumption of  coal,  and  so  enabling  vessels  to  be  not  only  sailed 
at  loss  cost,  but  to  carry  also  more  cargo,  were,  in  consequence 
of  demand  for  quick  and  cheap  service,  so  rapidly  effected 
that  tlio  numerous  and  expensive  steamer  constructions  of 
1870-73,  being  unable  to  compete  with  the  constructions  of 
the  next  two  years,  were  nearly  all  displaced  in  1875-76, 
and  sold  for  half,  or  less  tlian  half,  of  their  original  cost. 
And  within  another  decade  these  same  improved  steamers 
of  1875-70  have,  in  turn,  been  discarded  and  sold  at  small 
prices,  as  unfit  for  the  service  of  lines  having  an  established 
trade,  and  replaced  with  vessels  fitted  with  the  triple-expansion 
engines,  and  saving  nearly  fifty  per  cent  in  the  consumption 
of  fuel.  And  now  "  quadruple-expansion  "  engines  are  begin- 
ning to  be  introduced,  and  their  tendency  to  supplant  the 
"  triple  expansion  "  is  "  unmistakable." 

In  all  commercial  history,  probably  no  more  striking  illus- 
tration can  be  found  of  the  economic  principle  that  nothing 
marks  more  clearly  the  rate  of  material  progress  than  the 
rapidity  witii  which  that  which  is  old  and  has  been  considered 
wealth  is  destroyed  by  the  I'csults  of  new  inventions  and 
discoveries.^ 

Again,  with  the  reduction  of  the  time  of  the  voyage  to  the 
East  by  the  Suez  Canal  to  thirty  days  or  less,  and  with  tele- 
graphic conmiunication  between  India  and  China  and  the 
markets  of  the  Western  world,  permitting  the  dealers  and 
consumers  of  the  latter  to  adjust  to  a  nicety  their  supplies 

1  In  Hie  last  analysis  it  will  appear  that  there  is  no  such  tliinff  as  fixed 
capital ;  there  is  nothing  useful  that  is  very  old  except  the  precious  metals, 
and  all  life  consists  in  the  conversion  of  forces.  The  only  capital  which  is  of 
permanent  value  is  immaterial,  —  the  experience  of  generations  and  the  devel- 
opment of  science.  —  Edward  Atkinson. 


la 
4 


Mil 


vtl 


802 


ECONOMIC  HISTORY. 


% 


'¥f 


of  commodities  to  varying  demands,  there  was  no  longer  any 
necessity  of  laying  up  great  stores  of  Eastern  commodities  in 
Europe  ;  and  with  the  termination  of  this  necessity,  the  India 
warehouse  and  distribution  system  of  England,  with  all  tho 
labor  and  all  the  capital  and  banking  incident  to  it,  substan- 
tially passed  away.  Europe,  and  to  some  extent  the  United 
States,  ceased  to  go  to  England  for  its  supplies.  If  Austria 
wants  anything  of  Indian  product,  it  stops  en  route,  by  the 
Suez  Canal,  at  Trieste;  if  Italy,  at  Venice  or  Genoa;  if 
France,  at  Marseilles ;  if  Spain,  at  Cadiz.  IIow  great  has 
been  the  disturbance  thus  occasioned  in  British  trade  is  shown 
by  the  following  figures :  In  1871  the  total  exports  of  India 
were  £57,550,000,  of  which  £30,737,000  went  to  the  United 
Kingdom  ;  but  in  1885,  on  a  total  Indian  export  of  £85,087,000, 
the  United  Kingdom  received  only  £31,882,000.  During  the 
same  time  the  relative  loss  on  British  exports  to  India  was 
less  tlian  a  million  and  a  half  sterling. 

As  a  rule,  also,  stocks  of  Indian  produce  are  now  kept,  not 
only  in  the  countries,  but  at  the  very  localities  of  their  pro- 
duction, and  are  there  drawn  upon  as  they  are  wanted  for  im- 
mediate consumption,  with  a  greatly  reduced  employment  of 
the  former  numerous  and  expensive  intermediate  agencies. ' 
Tims  a  Calcutta  merchant  or  commission  agent  at  any  of  .the 
world's  great  centres  of  commerce  contracts  through  a  clerk 
and  the  telegraph  with  a  manufacturer  in  any  country  —  it 
may  be  half  round  the  globe  removed  —  to  sell  him  jute,  cot- 
ton, hides,  spices,  cutch,  linseed,  or  other  like  Indian  produce. 
An  inevitable  steamer  is  sure  to  be  in  an  Eastern  port,  ready 

1  In  illustration  of  this  curious  point,  attention  is  asked  to  the  following 
extract  from  a  review  of  the  trade  of  British  India,  for  tlie  year  1880,  from  the 
"  Times,"  of  India,  published  at  Bombay  :  "  What  tho  mercantile  conunu- 
nity  "  —  i.  e.,  of  Hombay  —  "has  suffered  and  is  suffering  from,  is  tlie  very  nar- 
row margin  which  now  exists  between  the  producer  and  consumer.  Twenty 
years  ago  the  large  importing  houses  held  stocks,  but  nowadays  nearly  every- 
thing is  sold  to  arrive,  or  bought  in  execution  of  native  orders,  and  the  bazaar 
dealers,  instead  of  European  importers,  have  become  the  holders  of  stocks. 
The  cable  and  canal  have  to  answer  for  tho  transformation;  wliile  the  ease 
with  which  funds  can  bo  secured  at  liome  by  individuals  absolutely  destitute 
of  all  knowledge  of  tho  trade,  and  minus  tho  capital  to  work  it,  has  resulted  in 
the  diminution  of  profits  both  to  importers  and  to  bazaar  dealers." 


;-JJ 


s&mt 


CHANGES  IN  TRANSPORTATION. 


303 


1 

10 

rk 


m- 
ar- 


inr 
ks. 

ISO 

ite 
in 


( 


to  sail  upon  short  notice ;  the  merchandise  wanted  is  bought 
by  telegraph,  hurried  on  board  the  ship,  and  the  agent  draws 
for  the  price  agreed  upon,  through  some  bank,  with  the  ship- 
ping documents.  In  four  w^oks,  in  the  case  of  England,  and 
a  lesser  time  for  countries  intermediate,  the  shipment  arrives  ; 
the  manufacturer  pays  the  bill,  either  with  his  own  money  or 
his  banker's;  and,  before  another  week  is  out,  the  cotton  and 
the  jute  are  going  through  the  factory;  the  linseed  has  been 
converted  into  oil,  and  the  hides  in  the  tannery  are  being 
transformed  into  leather. 

Importations  of  East  Indian  produce  are  also  no  longer  con- 
fined in  England  and  other  countries  to  a  special  class  of 
merchants ;  and  so  generally  has  this  former  large  and 
special  department  of  trade  been  broken  up  and  dispersed 
that  extensive  retail  grocers  in  the  larger  cities  of  Europe  and 
the  United  States  are  now  reported  as  drawing  their  supplies 
direct  from  native  dealers  in  both  China  and  India. 

Another  curious  ami  recent  result  of  the  Suez  Canal  con- 
struction, operating  in  a  quarter  and  upon  an  industry  that 
could  not  well  have  been  anticipated,  has  been  its  effect  on  an 
important  department  of  Italian  agriculture,  —  namely,  the 
culture  of  rice.  Tiiis  cereal  has  for  many  years  been  a  staple 
crop  of  Italy,  and  a  leading  article  of  Italian  export,  —  the 
total  export  for  the  year  1881  having  amounted  to  83,598 
tons,  or  167,190,000  pounds.  Since  tlie  year  1878,  however, 
rice  grown  in  Burmah,  and  other  parts  of  the  far  East,  has 
been  imported  into  Italy  and  other  countries  of  Southern 
Europe  in  such  enormous  and  continually  increasing  quanti- 
ties, and  at  such  rates,  as  to  excite  groat  apprehensions  amimg 
the  growers  of  Italian  rice,  and  largely  fUminish  its  exporta- 
tion,—  the  imports  of  Eastern  rice  into  Italy  alone  having 
increased  from  11,957  tons  in  1878  to  58,095  tons  in  1887. 
For  Prance,  Italy,  and  other  Mediterranean  ports  east,  the 
importation  of  rice  from  Southern  Asia  (mainly  from  Hurmah) 
was  152,147  tons  in  1887,  as  compared  with  about  20,000 
tons  in  1878. 

That  the  same  causes  are  also  exerting  a  like  influence  upon 
the  marketing  of  the  cereal  crops  of  the  United  States  is 


-H^' 


'^M 


'M 


m 


ii- 


304 


ECONOMIC  HISTORY. 


shown  by  the  circumstance  that  the  freight  rates  on  the  trans- 
port of  grain  from  Bombay  to  England,  by  way  of  the  Suez 
Canal,  declined  from  32.5  cents  per  bushel  in  1880,  to  16.2 
cents  in  1885 ;  and,  to  the  extent  of  this  decline,  the  ability  of 
the  Indian  ryot  to  compete  with  the  American  grain-grower, 
in  the  markets  of  Europe,  was  increased. 

How  great  was  the  disturbance  occasioned  in  the  general 
prices  of  the  commodities  that  make  up  Eastern  commerce  by 
the  opening  of  the  Suez  Canal,  and  how  qiiickly  prices  re- 
sponded to  the  introduction  of  improvements  in  distribution, 
is  illustrated  by  the  following  experience :  The  value  of  the 
total  trade  of  India  with  foreign  countries,  exclusive  of  its 
coasting-trade,  was  estimated,  at  the  time  of  the  opening  of 
tlic  canal  in  1869,  at  ^£105,500,000  ($527,500,000).  In  1874, 
however,  the  value  was  estimated  at  only  X 95,500,000,  or  at 
a  reduction  of  ten  per  cent ;  and  the  inference  might  naturally 
have  been  that  such  a  large  reduction  as  ten  millions  sterling 
(i50,000,000)  in  five  years,  with  a  concurrent  increase  in  the 
world's  population,  could  only  indicate  a  reduction  of  quanti- 
ties. But  that  such  was  not  the  case  was  shown  l)y  the  fact 
that  250,000  tons  more  shipping  (mainly  steam,  and  there- 
fore equivalent  to  at  least  500,000  more  tons  of  sail)  was  em- 
ployed in  transporting  commodities  between  India  and  foreign 
countries  in  1874  than  in  1869;  or,  that  while  the  value  of 
the  trade,  througli  a  reduction  of  prices  had  notably  declined 
during  this  period,  the  quantities  entering  into  trade  had  so 
greatly  increased  during  the  same  time  that  250,000  tons 
more  shipping  were  required  to  convey  it. 

In  short,  the  construction  of  the  Suez  Canal  completely 
revolutionized  one  of  the  greatest  departments  of  the  world's 
commerce  and  business  ;  absolutely  destroying  an  immense 
amount  of  what  had  previously  been  wealth,  and  d;si)lacing  or 
changing  the  employment  of  millions  of  capital  and  thousands 
of  men ;  or,  as  the  London  "  Economist "  has  expressed  it, 
"  so  altered  and  so  twisted  many  of  the  existing  modes  and 
channels  of  business  as  to  create  mischief  and  confusion  "  to 
an  extent  sufficient  to  constitute  one  great  general  cause 
universal  commercial   and  industrial   depression  and 


\rr 


iS^.U'    ^'UoO, 


CHANGES  IN  TRANSPORTATION. 


305 


The  deductions  from  the  most  recent  tonnage  statistics  of 
Great  Britain  come  properly  next  in  order  for  consideration. 
During  the  ten  years  from  1870  to  1880,  inclusive,  the  British 
mercantile  marine  increased  its  movement,  in  the  matter  of 
foreign  entries  and  clearances  alone,  to  the  extent  of  22,000,- 
000  tons  ;  or,  to  put  it  more  simply,  the  British  mercantile 
marine  exclusively  engaged  in  foreign  trade  did  so  much  more 
work  within  the  period  named ;  and  yet  the  number  of  men 
who  were  employed  in  elfecting  this  great  movement  had  de- 
creased in  1880,  as  compared  with  1870,  to  the  extent  of  about 
three  thousand  (2,990  exactly).  What  did  it  ?  The  intro- 
duction of  steam-hoisting  machines  and  grain-elevators  upon 
the  wharves  and  docks,  and  the  employment  of  steam-power 
upon  the  vessels  for  steering,  raising  the  sails  and  anchors, 
pumping,  and  discharging  the  cargo  ;  or,  in  other  words,  the 
ability,  through  the  increased  use  of  steam  and  improved  ma- 
chinery, to  carry  larger  cargoes  in  a  shorter  time,  with  no 
increase  —  or,  rather,  an  actual  decrease  — of  the  number  of 
men  employed  in  sailing  or  managing  the  vessels. 

Statistical  investigations  of  a  later  date  furnish  even  more 
striking  illustrations  to  the  same  effect  from  this  industrial 
specialty.  Thus,  for  1870,  the  number  of  hands  (exclusive  of 
masters)  employed  to  every  one  thousand  tons  capacity,  en- 
tered or  cleared  of  the  British  steam  mercantile  marine,  is 
reported  to  have  been  forty-seven,  but  in  1885  it  was  only 
27.7  ;  or  seventy  per  cent  more  manual  labor  was  required  in 
1870  than  in  1885  to  do  the  same  work.  In  sailing-vessels 
the  change,  owing  to  a  lesser  degree  of  improvement  in  the 
details  of  navigation,  has  been  naturally  smaller,  but  never- 
theless considerable  ;  twenty-seven  hands  being  required  in 
1885  as  against  thirty-five  in  1870  for  tlie  same  tonnage  en- 
tered or  cleared.*  Another  fact  of  interest  is,  that  the  recent 
increase  in  the  proportion  of  large  vessels  constructed  has  so 

1  Tlie  ofBcial  statistics  do  not  sliow  in  tlio  British  mercantile  marine  whether 
the  cconoYny  of  labor  wliicli  was  oEfeuted  prior  to  1880  has  continued  to  be  pro- 
gressive;  inasmuch  as  the  totals  for  1886-88  include  Lascars  and  Asiatics 
under  Asiatic  articles  of  agreement ;  allowing  for  this,  liowever,  the  proportion 
of  men  employed  to  every  one  thousand  tons  of  shipping  was  considerably 
smaller  in  the  years  1880-87  than  in  1884-85. 

20 


iit 


,•  'ISJ 


t  U'? 


m 


1  ■%\ 


<-^H 


w 


306 


ECONOMIC  HISTORY. 


"ii      i- 


Ir 


greatly  increased  the  efficiency  of  shipping,  and  so  clieapened 
the  cost  of  sea-carrlagc,  to  the  advantage  of  both  producers 
and  consumers,  that  much  business  that  was  before  impossible 
has  become  quite  possible.  Of  the  total  British  tonnage  con- 
structed in  1870,  only  six  per  cent  was  of  vessels  in  excess  of 
two  thousand  tons  burden ;  but  in  1884  fully  seventeen  per 
cent  was  of  vessels  of  that  size,  or  larger.  Meanwhile,  the 
cost  of  new  iron  (or  steel)  ships  has  been  greatly  reduced ; 
from  190  per  ton  in  1872-74  to  *65  in  1877,  #57  in  1880, 
while  in  1887  first-class  freighting  screw-steamers,  constructed 
of  steel,  fitted  with  triple  compound  engines,  with  largely 
increased  carrying  capacity  (in  comparison  with  former  iron 
construction)  and  consequent  earning  power,  and  capable  of 
being  worked  at  less  expense,  could  have  been  furnished  for 
133.95  per  ton.i 

1  The  following  is  a  copy  of  a  circular  issued  in  October,  1887,  by  'bo  rep- 
resentatives in  Now  York  of  a  well-known  iron-sbip-building  flrni  at  Newcastle- 
on-Tyne,  England :  — 

"  Inviting  your  attention  to  the  inclosed  particulars  of  two  steel  screw 
freigiit  steamers  building  to  our  order,  by  the  well-known  builders,  Messrs. 
,  of  Newcastle-on-Tyne,  wo  beg  to  give  you  some  additional  details : 

"  The  contract  price  is  £34,250  each,  which  is  just  about  XG  17s.  (six  pounds 
seventeen  shillings  sterling)  a  ton  dead-weight  capacity,  and  including  all  ex- 
penses up  to  time  of  delivery,  will  not  exceed  £7  a  ton  dead-weight,  or  at 
present  rate  of  exchange,  $3;5.95  American  money. 

"  Tlius  it  will  lie  seen  that  as  regards  the  cost  of  these  vessels,  while  of  large 
carrying  capacity  nnd  consequent  earning  power,  and  fitted  as  tliey  will  be  with 
engines  of  the  newest  type  and  with  all  modern  appliances  whicli  liave  been 
tried  and  found  conducive  to  quick  and  economical  working  (while  avoiding  all 
innovations  of  an  experimental  character),  the  present  price  of  not  over  £1  per 
ton,  dead-weight  capacity,  as  against  £12  to  £VA  a  few  years  ago,  renders  the 
difference  in  values  relatively  even  greater  tlian  appears  at  first  sight." 

A  brief  examination  of  what  is  embraced  in  tlio  construction  of  these  vessels 
is  not  a  little  interesting  and  instructive,  especially  to  those  who  recall  wliat 
w.is  deemed  but  a  comparatively  few  years  ago  the  very  best  conditions  for 
ocean  steam  navigation:  Triple-expansion  engines  —  three  cylinders  —  of  the 
latest  and  most  approved  type.  Horse-power,  1,700.  Propeller  shifting  blades 
and  spare  set ;  each  part  of  engines  interchangeable.  Two  double-ended  steel 
boilers,  in  the  corrugated  furnaces,  to  work  at  one  hundred  and  fifty  pounds 
pressure.  Four  steam  winches  of  most  approved  pattern  and  large  power. 
Steam  steering-gear  forward,  and  powerful  hand-gear  aft.  Patent  stockless 
anchors,  working  direct  into  hawser  pipes,  effecting  great  saving  in  time,  labor, 
and  gear.  Water-ballast  in  double  bottom.  Lighthouses  on  forecastle.  Decks 
of  steel  throughout ;  height,  seven  feet,  nine  inches,  being  the  suitable  height 


CHANGES  IN   TRANSPORTATION. 


807 


liivge 
with 
been 

per 

irs  the 

resscls 
what 

lis  for 
)f  the 

blades 
Bteel 

lounils 
)ower. 
ckless 
labor, 
Decks 
height 


Prior  to  about  the  year  1875  ocean  steamships  had  not  been 
formidable  as  freight-carriers.  The  marine  engine  was  too 
Jicavy,  occupied  too  nmch  space,  consumed  too  much  coal. 
For  transportation  of  passengers,  and  of  freight  having  largo 
value  in  small  s{)ace,  they  were  satisfactory ;  but  for  perform- 
ing a  general  carrying-trade  of  the  heavy  and  bulky  articles 
of  commerce  they  were  not  satisfactory,  A  steamer  of  tlio 
old  kind,  capable  of  carrying  three  thousand  tons,  might  sail 
on  a  voyage  so  long  that  she  would  be  compelled  to  carry 
twenty-two  hundred  tons  of  coal,  leaving  room  for  only  eight 
hundred  tons  of  freight;  whereas,  at  the  present  time,  a 
steamer  with  the  compound  engines  and  all  other  modern 
improvements  can  make  the  same  voyage  and  practically 
reverse  the  figures, —  that  is,  carry  twenty -two  hundred  tons 
of  freight  with  a  consumption  of  only  eight  hundred  tons  of 
coal.  The  result  of  the  construction  and  use  of  compound 
engines  in  economizing  coal  has  been  illustrated  by  Sir  Lyon 
Playfair  by  the  statement  that  "  a  small  cake  of  coal,  which 
would  pass  through  a  ring  the  size  of  a  shilling  when  burned 
in  the  compound  engine  of  a  modern  steamboat  would  drive  a 
ton  of  food  and  its  proportion  of  the  ship  two  miles  on  its  way 
from  a  foreign  port."  Another  calculator,  says  the  London 
''  Engineer,"  has  computed  that  half  a  sheet  of  note-paper  will 
develop  sufhcient  power,  when  burned  in  connection  with  the 
triple-expansion  engine,  to  carry  a  ton  a  mile  in  an  Atlantic 
steamer.  How,  vmder  such  circumstances,  the  charge  for  sea- 
freights  on  articles  of  comparatively  high  value  has  been  re- 
duced, is  shown  by  the  fact  that  the  ocean  transport  of  fresh 
meats  from  New  York  to  Liverpool  docs  not  exceed  one  cent 
(i(/.)  per  pound;  and  including  commissions,  insurance,  and 
all  other  items  of  charge,  docs  not  exceed  two  cents  (It?.)  per 

for  passengers,  horses  anil  cattle.  Ventilation  of  holds  specially  provided 
through  automatic  exhaustion  by  means  of  the  funnel.  Ilatclies  of  largo 
dimensions  capable  of  taking  in  locomotives  or  other  large  pieces  of  machinery. 
Six  steel  bulkheads,  witli  longitudinal  bulkheads  throughout  holds  and  between 
decks.  Coal  consumption  twenty-two  tons  per  day.  Coal-bunkers  sufficient 
for  forty  days'  Btcaining ;  outfit  in  sails,  steel  hawsers,  oil  and  water  tanks,  load- 
ing and  discharging  gear,  cutlery,  plate,  china,  and  glass,  and  optician's  stores  — 
all  of  the  best  makers  and  full  supply. 


A.) 


•I 


'd 


T 


10  V' 

^  > 
u    < 


V) 


I  • 


308 


ECONOMIC  HISTORY. 


pound.  Boxed  meats  have  also  boon  carried  from  Chicago  to 
Loudon  as  a  regular  business  for  fifty  cents  jjcr  100  pounds. 
In  18G0  GcL  (twelve  cents)  per  bushel  was  about  the  lowest 
rate  charged  for  any  length  of  time  for  the  transportation  of 
bulk  grain  froniNcnv  York  to  Liverpool,  and  for  a  part  of  tliiit 
year  the  rate  ran  up  as  high  at  ISJf/.  (twenty-seven  cents)  per 
bushel.  But  for  the  year  1880  (he  average  rate  for  the  same 
service  was  2\(l.  (live  cents)  per  bushel ;  while  in  April,  1888, 
the  rate  on  grain  from  New  York  to  Liverpool  by  steam  de- 
clined to  as  low  a  figure  as  Id.  per  bushel  of  sixty  pounds  ; 
3(?.  to  Antwerp,  and  1<L  to  Glasgow.  It  seems  almost  need- 
less to  add  that  these  rates  were  much  below  the  actual  cost 
of  carriage.  In  like  manner,  the  cost  of  the  ocean  transpor- 
tation of  tea  from  Cluna  and  Japan,  or  sugar  from  Cuba, 
or  coffee  from  Brazil,  has  been  greatly  reduced  by  tlie  same 
causes. 

The  above  are  examines  on  a  large  scale  of  the  disturbing 
influence  of  the  recent  application  of  steam  to  maritime  in- 
dustries. The  following  is  an  example  drawn  from  compara- 
tively one  of  the  smallest  of  the  world's  industries,  prosecuted 
in  one  of  the  most  out-of-the-way  places :  The  seal-fishery  is  a 
most  important  industrial  occupation  and  source  of  subsis- 
tence to  the  poor  and  scant  population  of  Newfoundland. 
Originally  it  was  prosecuted  in  small  sailing-vessels,  and  uj)- 
ward  of  a  hundred  of  such  craft,  employing  a  large  number  of 
men,  annually  left  the  j)ort  of  St.  John's  for  the  seal-hunt. 
Now  few  or  no  sailing-vessels  engage  in  the  business  ;  steam- 
ers have  been  substituted,  and  the  same  number  of  seals  arc 
taken  with  half  the  number  of  men  that  were  formerly  needed. 
The  consequence  is,  a  diminished  opportunity  for  a  population 
of  few  resources,  and  to  obtain  "  a  berth  for  the  ice,"  as  it  is 
termed,  is  considered  as  a  favor. 

Is  it,  therefore,  to  be  wondered  at  that  the  sailing-vessel  is 
fast  disappearing  from  the  ocean ;  ^  that  good  authorities  esti- 


1  The  statistics  of  the  world's  shipping  show  that  in  1885  there  were  25,700 
sailintj-vcssds,  of  11,216,018  tons;  in  1880  there  were  25,155,  of  10,411,807  tons; 
and  in  1887  there  were  23,310,  of  9,820,492.  The  decrease  in  two  years  was 
therefore,  1,396,123,  or  12.4  per  cent. 


i 


CHANGES  IN  TRANSPORTATION. 


809 


in- 


lol  is 

Icsti- 

[5,766 

|tons; 

was 


mated  in  1886  that  the  tonnage  then  afloat  was  about  twenty- 
live  per  cent  in  excess  of  all  that  was  needed  to  do  the  then 
carrying-trade  of  tlic  world  ;  and  that  ship-owners  everywhere 
were  unanimously  of  the  opinion  that  the  depression  of  indus- 
try was  universal  ? 

[During  tlio  yciir  1888,  from  causes  that  must  be  regarded  as 
exceptional  (and  which  will  be  hereafter  noticed),  an  increased 
demand  for  sliiiii)ing  accommodatiou  suddenly  sitriing  up,  and 
which,  not  being  readily  supplied,  was  followed  by  an  almost  con- 
tinued advance  in  freight  rates,  until  in  many  directions  —  i.  e., 
in  the  Kussian  grain  and  Eastern  trade  —  the  rise  was  equal  to  one 
hundred  per  cent  advance  ui)on  the  rates  current  in  1887  and  the 
early  months  of  1888.  This  condition  of  affairs  in  turn  gave  a 
great  impulse  to  ship-building,  especially  in  Great  Britain,  where 
the  construction  for  1888  amounted  to  903,087  tons,  as  against 
()37,0()0  in  1887;  an  extent  of  annual  increase  that,  except  in  two 
instances,  has  never  been  exceeded.  The  additional  tonnage  thus 
supplied  proving  in  excess  of  the  world's  demand,  the  advance  in 
freights  in  1888  was  in  a  great  measure  lost  in  the  first  six  months 
of  1889.] 

Groat,  however,  as  has  been  the  revolution  in  respect  to 
economy  and  efficiency  in  the  carrying-trade  upon  the  ocean, 
the  revolution  in  the  carrying-trade  upon  land  during  the  same 
period  has  been  even  greater  and  more  remarkable.  Taliing 
the  American  railroads  in  general  as  representative  of  the  rail- 
road system  of  the  world,  the  average  charge  for  moving  one 
ton  of  freight  per  mile  has  been  reduced  from  about  2.5  cents 
in  1869  to  1.06  in  1887 ;  or,  taking  the  results  on  one  of  the 
standard  roads  of  the  United  States  (the  New  York  Central), 
from  1.95  in  1869  to  0.68  in  1885.1  To  grasp  fully  the  mean- 
ing and  significance  of  these  figures,  their  method  of  presen- 
tation may  bo  varied  by  saying  that  two  thousand  pounds  of 
coal,  iron,  wheat,  cotton,  or  other  commodities,  can  now  be 

1  On  certain  of  the  railroads  of  the  United  States  an  even  lower  averapo 
rate  of  freijjht  has  been  reported.  Tlius,  for  tlio  year  1886  tlie  Micliigan  Cen- 
tral Railroad  reported  0.56  cent  as  their  average  rate  per  ton  per  mile  for  tluit 
year,  and  the  Lake  Sliore  and  Micliigan  Soutlicrn  liailroad  0.55  cent  for  like 
service. 


4^i 


'5^ 


mi 


m 


I 


310 


ECONOMIC  HISTORY. 


c'itrri(>d  on  tlic  beet  mannRod  railways  for  a  distanoo  of  one 
niilo  for  a  sum  ho  small  that  outside  of  China  it  would  bo 
dillicidt  to  (ind  a  coin  of  equivalent  value  to  f»;iv(3  to  n  boy  as  a 
reward  for  carry iiif?  an  ounce  i)ackago  across  a  street,  oven  if 
a  man  or  boy  could  l)0  found  in  Europe  or  the  United  States 
willing  to  give  or  accept  so  small  a  compensation  for  sueli  a 
service. 

The  following  ingenious  method  of  illustrating  the  same  re- 
sults has  been  also  suggested  :  The  number  of  miles  of  rail- 
road in  operation  in  vai'ious  parts  of  the  world  in  1885  was 
probably  about  300,000.'  Reckoning  their  capacity  for  trans- 
portation at  a  rate  not  greater  than  the  results  actually 
achieved  in  that  same  year  in  the  United  States,  it  would 
appear  that  the  aggregate  railroad  system  of  the  world  could 
easily  have  performed  work  in  1885  eipiivalent  to  transporting 
120,000,000,000  tons  one  mile.  "  IJut  if  it  is  next  considered 
that  it  is  a  fair  day's  work  for  an  ordinary  horse  to  haul  a 
ton  G.7  miles,  year  in  and  year  out,  it  further  appears  that  the 
railways  have  added  to  the  power  of  the  human  race,  for  the 
satisfaction  of  its  desires  by  the  cheapening  of  products,  a 
force  somewhat  greater  than  that  of  a  horse  working  twelve 
days  yearly  for  every  inhabitant  of  the  globe." 

In  the  year  1887  the  freight-transportation  by  the  railroads 
of  the  United  States  (according  to  Poor's  "Manual")  was 
equivalent  to  60,001,009,996  tons  carried  one  mile  ;  wliile  the 
population  for  that  year  was  somewhat  in  excess  of  60,000,000. 
The  railroad  freight  service  of  the  United  States  for  1887  was 
therefore  equivalent  to  carrying  a  thousand  tons  one  mile  for 
every  person,  or  every  ton  a  thousand  miles.  The  average 
cost  of  this  service  was  about  -f  10  per  annum  for  every  person. 
IJut  if  it  had  been  entirely  performed  by  horse-power,  even 
under  the  most  favorable  of  old-time  conditions,  its  cost  wouUl 
have  been  about  |200  to  each  inhabitant,  which  in  turn  would 
represent  an  expenditure  greater  than  the  entire  value  of  the 
then  annual  product  of  the  country ;  or,  in  other  words,  all 

1  The  world's  railway  mileage  for  January,  1889,  was  probably  in  excess  of 
.370,000  miles.  At  the  same  date  the  telegrajjh  system  of  the  world  comprised 
at  least  1,000,000  miles  of  length  of  line. 


'8j 


'f: 


VIIANGES   IN   TRANSPORTATION. 


311 


that  the  people  of  the  LFnitod  Stntcw  earned  in  1H87  would  not 
p:iy  the  cout  of  tnin8|)(>rlation  ulono  of  the  amount  of  hucIi 
Hervico  rendered  in  tliat  year,  had  it  been  performed  by  horse- 
power exclusively.' 

Less  than  half  a  century  ago,  the  railroad  was  practically 
unknown.'''  It  is,  therefore,  within  that  short  period  that  this 
enormous  power  has  been  placed  at  the  disposal  of  every  in- 
habitant of  the  globe  lor  the  cheapening  of  transportation  to 
him  of  the  products  of  other  people  and  countries,  and  for 
enabling  him  to  market  or  exchange  to  better  advantage  the 
results  of  his  own  labor  or  services.  As  the  extension  of 
the  railway  system  has,  however,  not  been  equal  in  all  parts 
of  the  world  —  less  tluui  thirty  thousand  miles  existing,  at 
the  close  of  1887,  in  Asia,  Africa,  and  Australia  combined  — 
its  accruing  benefits  have  not,  of  course,  been  equal.  And 
while  all  the  inhabitants  of  the  globe  have  undoubtedly  been 
profited  in  a  degree,  by  far  the  greater  part  of  the  enormous 
additions  that  havo  been  made  to  tho  world's  working  force 
through  tho  railroad  since  1840,  havo  accrued  to  the  benefit 
of  the  people  of  the  United  States,  and  of  Europe,  —  exclusive 
of  Russia,  Turkey,  and  tho  former  Turkish  provinces  of  nouth- 
eastorn  Europe,  —  a  number  not  much  exceeding  two  hundred 
millions,  or  not  a  quarter  part  of  the  entire  population  of  tho 
globe.  Tho  result  of  this  economic  change  has  therefore 
been  to  broaden  and  deepen  rather  than  diminish  the  line 
of  separation  between  the  civilized  and  tho  semi-civilized  and 
barbarous  nations. 

Now,  while  a  multi])licity  of  inventions  and  of  experiences 
have  contributed  to  the  attainment  of  sucii  results  under  this 
railroad  system  of  transportation,  the  discovery  of  a  method 

1  One  further  interesting  corollary  of  this  exhil)it  is  thiit  the  avornRe  rettirii, 
in  tho  form  of  interest  ami  dividends,  on  the  enormous  aniount  of  capital  which 
has  been  actually  expended  in  order  tliat  the  present  railway  service  in  the 
United  States  may  bo  performed,  cannot  be  estimated  as  in  excess  of  four  per 
cent  per  annum  as  a  maximum. 

*  As  late  as  1840  there  were  in  operation  only  about  2,800  miles  of  railway 
in  America,  and  2,130  in  Europe,  or  a  total  of  4,0!)0  miles.  For  practical  pur- 
poses, it  may  therefore  be  said  that  tho  world's  railway  system  did  not  then 
exist ;  while  its  organization  and  correspondence  for  doing  full  and  efficient 
work  must  be  referred  to  a  much  later  period. 


utA: 


m 


It  1 


mm 


Si'. 

h'- 


III 


I 

hi 


If."!  !i  *r 


I! 


If-      ,^ii 


312 


ECONOMIC  HISTORY. 


of  making  s^t'c?  cheap  was  the  one  thing  which  was  ahsolutoly 
essential  to  nuilvC  them  finally  possible  ;  inasmuch  as  the  cost 
of  fmiuently  replacing  rails  of  iron  would  have  entailed  such 
a  burden  of  exi)enditure  as  to  have  rentlered  the  present 
cheapness  of  railway  transportation  utterly  unattainable. 
Note,  therefore,  how  ra])idly  improvenacuts  in  processes  have 
followed  the  discovery  of  Bessemer,  until,  on  the  score  of  rel- 
ative first  cost  alone,  it  has  become  economical  to  substitute 
steel  for  iron  in  railroad  construction.  In  1873  JJessemer 
steel  in  England,  where  its  price  has  not  been  enhanced  by 
jtrotective  duties,  commanded  $!80  per  ton  ;  in  1S8G  it  was 
profitably  nuiuul'actured  and  sold  in  the  same  country  for  less 
than  •'^20  per  ton  !i  Within  the  si.uc  time  the  annual  pro- 
ducing capacity  of  a  Bessemer  converter  has  been  increased 
fourfold,  with  no  increase  but  rather  a  diminution  of  the  in- 
volved labor ;  and,  by  the  Gilchrist-Tiiomas  process,  four  men 
can  now  make  a  given  product  of  steel  in  the  same  time  and 
with  less  cost  of  material  than  it  took  ten  men  ten  years  ago 
to  accomi»lish.  A  ton  of  steel  rails  can  now  alst)  be  made 
with  live  thousand  pounds  of  coal,  as  compared  with  ten 
thousand  pounds  in  18G8. 

''Till'  iinportaiK'o  of  tlio  Besseinor  invontidu  of  stool  can  bo  host 
undorstood  bv  looking  at  the  world's  production  of  tliat  niotal  in 
1SS7.  Tho  i)i'odiiction  of  Bossonior  stool  in  tlio  oiglit  cliiof  iron 
and  stool  jirodiicing  countries  of  the  world  amounted  in  that  year 
to  7,2(il),7(i7  tons,  as  compared  with  (),0.'U,llo  tons  in  18S(),  show- 
ing an  increase  of  1,200,()',)4  tons,  or  twenty  per  cent.  The  sav- 
ing oftectod  I)y  railway  companies  by  the  use  of  Bessemer  metal 
and  tho  additional  security  ii;ainod  tiiereby  is  sliown  by  the  fact 
tliat  a  locomotive  on    the    Groat    Northern    Kailway   has   acctun- 

1  Tl)c  tivoMfjo  price  of  iron  rails  in  Groat  Britain  for  tlie.  year  1S83  was  L'-') 
per  ton  ;  stool  rails  in  the  saino  market  sold  in  18()t)  for  .C\  Ss.  per  ton  ;  and  in 
1887  sales  of  ^tcel  rails  wore  made  in  Holnium  for  .£3  lO.s.  ($18.75)  \wr  ton,  df- 
livcrable  at  the  works.  The  avcrajic  price  of  steel  rails  in  Pennsylvania  (U.  S.) 
at  the  works,  for  1880,  with  a  tariff  on  imjiorts  of  §17  per  ton,  was  S3U  per 
ton.  Since  the  bofrinninf;  of  1883  the  maniifactnro  of  iron  rails  in  tho  United 
States  has  been  almost  entirely  discontinned,  and  dnrinji;  the  years  from  1883 
to  1888  there  were  virtnally  no  market  qnotalions  for  them.  The  last  recorded 
average  price  for  iron  rails  was  ^\o\  per  ton  in  1882. 


■I 


CHANGES  IN  TRANSPORTATION. 


813 


111  ill 

iriMi 

yi'iw 

luiw- 

SilV- 
lU'till 

fact 
h'oni- 


tiis  X'.'. 
id  in 


\V.  S.) 


nitcnl 

1883 

Drded 


jilislu'il,  witli  a  iiuxk'ratc  train-loud  of  passougor  t-oaclu's,  a  statute 
mile  ill  fifty  seconds,  or  at  tho  rate  of  seventy-two  miles  per  hour, 
and  makes  a  considerable  continuous  run  at  a  speed  of  one  mile  per 
minute,  — a  rate  of  railway  travelling  almost  lieyond  the  dreams  or 
ivnticipations  of  tho  renowned  (Jeorge  !Stei)lienson."  The  use  of 
stetd  in  jdai-o  of  iron  in  shi])-constriietiou  may  be  said  to  date  from 
1878,  and  the  ra[iidit3'  with  which  the  former  has  replaced  the  lat- 
ter metal  is  very  remarkable.  Thus,  in  1878  '*  the  percentage  t>f 
steel  used  in  the  construction  of  steamships  in  Clreat  Ihitain  was 
only  I'OU  but  in  1887  the  percentage  of  iron  used  in  proportion  to 
steel  was  only  0'1)3;  or,  in  other  words,  in  1878  there  was  ninety 
times  as  much  iron  as  steel  used  for  steamers,  but  in  1887  there 
was  more  than  eight  times  the  quantity  of  steel  nsed  as  compared 
with  iron  for  the  same  purjiose,  and,  as  regards  sailing-ships,  the 
(piantity  of  steel  used  in  1887  amounted  to  practically  one  half 
that  of  iron."  —  Adi/irsii  of  f/ic  President  {Mr.  Adaiiisun)  of  the 
British  Iron  and  Steel  Association,  JIiii/,  ISbS. 

Tlie  api)lication  and  use  of  steam  alone  up  to  date  (1880) 
has  accordinuly  more  than  trebled  man's  working  power,  and 
by  enabling  him  to  economize  his  physical  strength  has  given 
him  greater  leisure,  comfort,  and  abundance,  and  also  greater 
opportuiiily  for  that  mental  training  which  is  essential  to  a 
liiglier  develojiment.  And  yet  it  is  certain  that  four  fifths  of 
the  steam-engines  now  working  in  the  world  have  been  con- 
structed during  the  last  (puirter  of  a  C(>ntury,  or  sinci'  iSOo. 

One  of  the  most  momentous  and  what  maybe  called  human- 
itarian results  of  the  recent  great  extension  and  cheapening 
of  tiie  world's  railway  system  and  service  is  that  there  is 
now  no  longer  any  occasion  for  the  people  of  any  country 
indulging  in  either  excessive  hopes  or  fears  as  to  the  results 
(if  any  particular  harvest;  inasnuich  as  the  failure  of  crops 
in  any  one  country  is  no  longer,  as  it  was,  no  later  than 
twenty  years  ago,  identical  with  high  prices  of  grain ;  the 
prices  of  cereals  being  at  present  regidated,  not  within  any 
particular  country,  but  by  the  combined  production  and  con- 
sumption of  all  countries  made  mutually  accessilde  by  rail- 
roads and  steamships.  As  a  matter  of  fact,  indeed,  the 
granaries  for  no  small  portion  of  the  sur}ilus  stock  of  the 


H^ 


^ 


:>:4 


m-f 


314 


ECONOMIC  HISTORY. 


B'V^    T 


world's  cereals  are  at  the  present  time  ships  and  railroad- 
cars  in  the  process  of  movement  to  the  points  of  <rreatcst 
demand  for  consumption.  Hence  it  is  that,  since  1870,  years 
of  locally  bad  crops  in  Europe  have  generally  witnessed  con- 
siderably lower  prices  than  years  when  the  local  crops  were 
good,  and  there  was  a  local  surplus  for  export.^ 

In  short,  one  marked  effect  of  the  present  railroad  and 
steamship  system  of  transportation  has  been  to  compel  a  uni- 
formity of  prices  for  all  commodities  that  are  essential  to  life, 
and  to  put  an  end  forever  to  what,  less  than  half  a  century 
ago,  was  a  constant  feature  of  European  commercial  experi- 
ence, namely,  the  existence  of  local  markets,  with  widely 
divergent  i)rices  for  such  commodities. 

How  much  of  misery  and  starvation  a  locally  deficient  har- 
vest entailed  under  the  old  system  upon  the  poorer  classes, 
through  the  absence  of  opportunity  of  sujiplying  the  deficiency 
through  importations  from  other  countries  and  even  from 
contiguous  districts,  is  shown  by  the  circumstance  that  in  the 
English  Parliamentary  debates  upon  the  corn  laws,  about  the 
3'ear  1840,  it  was  estimated  upon  data  furnished  by  Mr.  Tooke, 
in  his  ''  History  of  Prices,"  that  a  deficiency  of  one-sixth  in 
the  I']nglish  harvest  resulted  in  a  rise  of  at  least  one  hundred 
jicr  cent  in  the   price   of   grain;    and   another  estimate  by 


m^- 


^  A  ccntur.v  npo  every  nation  of  Europe  raised  in  ordinary  years  enough 
grain  to  supply  the  needs  of  its  own  population,  and  tlie  circulation  of  food 
from  country  to  country,  and  from  province  to  proviocc,  was  restricted  and 
even  generally  proliihited.  After  the  middle  of  the  eighteenth  century  there 
were  indications  that  the  domestic  growth  of  wheat  in  England  was  falling 
helow  the  consinnption  of  the  people;  hut  this  unpleasant  fact  was  studiously 
concealed  —  by  the  enormously  expensive  corn  laws,  which  on  the  one  hand 
artificially  stimulated  agriculture  and  kept  poor  lands  in  cultivation,  and,  on 
tlie  other,  restricted  through  high  prices  the  consumption  of  bread  —  and  was 
not  openly  recognized  for  nearly  half  a  century  later.  Subsequently  the  other 
nations  of  Europe,  with  the  exception  of  Hussia  ami  Austria-Hungary,  have 
experienced  the  same  alteration  in  their  food-producing  capacity  —  in  part  due 
to  natural  influences,  and  in  part  to  artificial  factors  —  which  have  turned  the 
attention  of  the  people  away  from  the  cultivation  of  cereals  into  employments 
tfiat  promised  to  be  more  profitable;  and  they  have  found  it  cheaper  to  import 
food  than  to  grow  it  themselves.  So  that  there  are  now  no  countries  in  Europe 
save  the  two  above  mentioned  that  have  a  surplus  product  of  wheat  available 
for  export. 


i. ,  .•• «  ■ 


;e  by 

nough 
food 
and 
there 
iiUing 
iously 
liand 
nd,  on 
d  was 
otluT 
have 
•t  due 
■d  the 
ments 
iiport 
urope 
liable 


CHANGES  IN  TRANSPORTATION.  315 

Davcnant  and  King,  for  the  close  of  the  seventeenth  century, 
corroborates  this  apparently  excessive  statement.  The  esti- 
mate of  these  latter  authorities  was  as  follows  :  — 

For  a  dtHcit  There  will  be  a 

equal  to—  rise  in  price  of — 

1-10 ' 3-10 

2-10 8-10 

3-10 1^-10 

4-10 -'«-10 

5-10 40-10 

As  late  as  1817  the  difference  in  France  between  the  highest 
and  the  lowest  prices  of  grain  in  different  parts  of  the  country 
was  45  francs  per  hectolitre.  In  1847  the  average  dift'erenec 
was  2G  francs.  Since  1870  the  greatest  difference  at  any 
time  has  not  been  in  excess  of  3.55  francs.  The  following 
table,  given  on  German  authority,  and  representing  the  price 
(in  silver  gulden  per  hectolitre)  of  grain  for  various  pe- 
riods, exhibits  a  like  progress  of  price  equalization  between 
nations  :  — 


rKHIOD. 


182l-:]0 
1H:JI-'40 
1841-'o0 
18ol-'tJ0 
1801-70 


EiiglnnJ. 


10  25 

y  tio 

015 
940 
8-80 


Franco. 


7tll 
7  89 

7-84 
8' 5!) 


Rclgium. 


044 

7  81 
7'.)0 
065 
9-24 


Prussia. 


5fi5 

0  41 

807 
7-79 


For  grain  henceforth,  therefore,  the  railroad  and  tlie  steam- 
ship have  decided  that  there  sliall  be  but  one  market  —  the 
world  ;  and  that  the  margin  for  speculation  in  this  commodity, 
so  essential  to  the  well-!)oing  of  Innnanify,  shall  be  restricted 
to  very  narrow  limits  ;  the  speculator  for  a  rise  in  wheat  in 
any  one  country  finding  himself  ])raetically  in  competition 
with  all  wheat-j)roducing  countries  the  moment  he  undertakes 
to  advance  prices ;  while  fvbnormal  values  in  one  country  or 
market,  or  excessive  reserves  at  one  centre  or  another,  are 
certain  to  be  speedily  neutralized  and  controlled  by  the 
influence  of  all  countries  and  markets. 


'Cil 


i 


^!1 


W'i 


In 

h 


I' 


li )' : 


I 


/■. 


.;![1 


I     \ 


31G 


ECONOMIC  Ills  TOR  Y. 


The  movement  and  prices  of  wheat  for  the  year  1888  fur- 
nish a  most  remarkable  ilUistration  and  oonfirmution  of  the 
above  statements,  and  also  (as  Sir  James  Caird  has  pointed 
out)  ''of  the  smoothness  (at  the  present  time)  of  the  o])cra- 
tions  of  trade  nnder  natural  conditions."  During  the  eleven 
months  of  1888,  ending  November  30(h,  (Ireat  .Uritain  im- 
ported a  little  more  than  sixty-seven  million  hundred-weight 
of  wheat  and  Hour.  Jn  the  cornspouding  eleven  months  of 
1887  the  foreign  supi)ly  was  practically  the  same.  There 
was,  however,  a  very  great  change  in  the  sources  of  supply. 
Thus,  in  1887,  North  and  South  America  furnished _/'()W//-;(//((' 
million  hundred-weight  out  of  the  Hlxfij-scvcn  million  Inmdred- 
weight  that  Great  liritain  required;  but  in  1888  the  harvests 
of  America  were  comparatively  meagre,  and  sup|)lied  Great 
Britain  with  but  twenty-nine  million  hundred-weight,  leaving 
a  deficiency  of  twenty  millions  to  be  ol)tained  from  other 
sources.  Eastern  Eui'o])C,  and  especially  Russia,  which  were 
favored  during  the  year  1888  with  splenilid  weather  and  enor- 
mous crops,  were  able  to  {tromptly  make  good  the  missing 
twenty  millions  ;  but  the  market  changes  and  vicissitudes  of 
trade  eonsequent  on  such  an  extensive  transfer  of  the  British 
supplies  of  wheat  were  something  extraordinary.  Twenty 
years  ago,  had  Russia  in  any  one  year  harvested  a  surplus  of 
wheat  as  large  as  she  did  in  1888,  such  surplus,  through  an 
inability  to  cheaply  and  promptly  move  it  to  a  market,  would 
have  been  not  only  of  little  monetary  value  to  the  prodiu'er, 
but  would  probably  by  its  unsalable  presence  in  the  country 
have  considerably  lowered  the  market  price  of  so  much  of  the 
crop  as  was  required  for  home  consumption.  Under  existing 
conditions,  however,  great  gain  accrued  to  the  Russian  farmer 
and  to  all  the  interests  and  nationalities  employed  in  the 
movements  of  liis  product.  A  demand  for  shipping  for  this 
special  trade,  which  could  not  at  once  be  fully  sui)plie{l.  also 
occasioned  a  quick  advance  in  ocean  freights  in  all  quarters 
of  the  globe,  in  some  instances  to  the  extent  of  one  hundred 
per  cent,  and  concurrently  a  revival  of  the  industry  of  shiji- 
building.  On  the  other  hand,  this  transfer  of  the  wheat- 
supply  of  Great  Britain   represented  an  immense  change  in 


I;- :;! 


CHANGES  IN   TRANSPORTATION. 


817 


ISO 

M'S 

red 

llp- 

lat- 
iti 


the  carrying-tnido  and  business  of  the  United  States ;  while 
the  Anieriean  spceuhitor,  recognizing  the  hii-al  di'lieiency  of 
the  -wheat-crop  for  1888,  and  assiiniing  that  the  American 
supply  of  this  cereal  was  the  prime  factor  in  determining  its 
European  price,  largely  advanced  prices  (the  aveiage  price  of 
No.  2  red  winter  wheat  in  New  York  for  the  six  montlis 
ending  Heeemher,  1888,  having  been  81.01  per  l)ushel,  as  com- 
pared with  84.2  cents  for  the  corresponding  period  of  1887). 
IJut  in  this  they  were  disapi)ointed.  The  Eurojican  prices  did 
not  materially  advance;'  and  as  a  consequence,  while  the 
American  pul)lic  siiffercd,  "the  British  consumer  was  enabled 
to  eat  his  loaf  at  the  same  ])ricc  or  a  less  price  than  he  did  in 
the  previous  year."  And  if  the  consumer  was  not  a  student 
of  statistics,  he  would  not  have  been  in  the  least  conscious 
that  it  was  Russian  rather  than  American  grain  fi'om  which 
his  bread  was  manufactured.  In  short,  uniler  the  system  of 
commercial  freedom  which  Oreat  Britain  has  established,  all 
the  farming  interests  on  the  earth  grow  with  an  eye  to  Iho 
possible  advent  of  the  British  people  as  customers;  while 
the  latter,  on  their  part,  have  so  provided  themselves  with  the 
best  C(|uipment  for  anniiiilating  time  and  distance,  that  it  is  a 
matter  of  indilTercnee  to  them  whether  the  wh(>at-(lelds  which 
for  the  time  l)eiug  shall  have  their  preference  are  located  in 
India,  Russia,  Dakota,  South  America,  or  Australia. 

The  changes  cfTected  by  the  cheapened  means  of  transpor- 
tation have  moreover  been  equalled,  if  not  surpassed,  by  those 
•wrought  through  the  lessened  cost  and  increased  amount  of 
l)roduction.  The  world's  total  product  of  pig-iron  increased 
slowly  and  regularly  from  1870  to  1870,  at  the  rate  of  about 
2j  percent  jter  ainium,  but  after  1870  j)roduetion  increased 
enormously,  until  in  188:]  the  advance  among  all  nations  was 
82.2  i)er  cent  in  excess  of  the  make  of  1870,  the  increase  in 
the  product  of  the  United  Kingdom  being  43  per  cent,  and 
that  of  other  countries  100.1  per  cent  (Tcxt'nnonii  of  Sir  LoW' 
tliitn.   Bell,   British    Commission,   1881!).     Such  an    increase 

'  English  wlie.it  solil  Doc'eiiiljor  25,  18S8,  at  Xl  lis  Pul.  a  (luiirtiT,  niraiiist 
CI  lis".  2f/.,  or  2^  cents  a  busiiol  more  tlian  at  the  corresponding  date  in  1887, 
and  Is.  lOrf.  less  than  in  December,  1880. 


P  ": 


lav 


1' 


i; 


1 

; 

1 

1 

i 

P 

!f  I: 


m, 


ih'A 


}i,;(!i 


818 


ECONOMIC  HISTORY. 


(after  1879),  justified  perhaps  at  the  moment,  was  far  in 
excess  of  the  ratio  of  increase  in  the  world's  population,  and 
for  a  terra  of  years  j^reatly  disitroportionate  to  any  increase  in 
the  world's  consumption,  and  finally  resulted  as  has  been 
before  shown  (sec  Wells,  Chapter  1.),  in  an  extreme  depres- 
sion of  the  business,  and  a  remarkable  fall  of  prices. 

By  reason  largely  of  the  cheapening  of  iron  and  steel,  the 
cost  of  building  railroads  has  also  in  recent  years  been  greatly 
reduced.  In  1870-71,  one  of  the  leading  railroads  of  the 
Northwestern  United  States  built  12G  miles,  which  with  some 
tunnelling,  was  bojuled  for  about  840,000  per  mile.  The  same 
road  could  now  (1889)  be  constructed,  with  the  payment  of 
higher  wages  to  laborers  of  all  classes,  for  about  820,000  per 
mile. 

The  power  to  f'rn.ivate  earth,  or  to  excavate  and  blast  rock, 
is  from  five  to  i.  i.  un,  afi  great  ..s  it  was  when  operations 
for  the  constructi'-i'  Suez  Canal  were  commenced,  in 

1859-00.  The  machinery  seiit  to  the  Isthmus  of  ranamn, 
for  the  excavation  ;f  the  canal  at  that  point  was  computctl 
by  engineers  as  cajabie  f  pciiicni'  'g  the  labor  of  half  a 
million  of  men. 

The  displacement  of  muscular  labor  in  some  of  the  cotton 
mills  of  the  United  States,  Avithin  the  last  ten  years,  by  im- 
proved machinery,  has  been  from  thirty-three  to  fifty  per  cent, 
and  the  average  work  of  one  operative,  working  one  year,  in 
the  best  mills  of  the  United  States,  will  now,  according  to 
Jlr.  Atkinson,  supply  the  annual  wants  of  1,600  fully  clothed 
Chinese,  or  0,000  partially  clothed  East  Indians.  In  1S40 
an  oiierative  in  the  cotton-mills  of  Rhode  Island,  working 
thirteen  to  fourteen  hours  a  day,  turned  off  9,000  yards  of 
standard  sheeting  in  a  year;  in  1880  the  operative  in  the 
same  mill  made  about  80,000  yards,  working  ten  hours  a  day. 
In  1840  the  wages  were  8170  a  year;  in  1880  the  wages  were 
$285  a  year. 

The  United  States  census  returns  for  1880  report  a  very 
large  increase  in  the  amount  of  coal  and  copper  produced 
during  the  ten  previous  years  in  this  country,  with  a  very 
large  comparative  diminution  in  the  number  of  hands  cm- 


is.  ■  ■ 


CHANGES  IN   TRANSPORTATION. 


319 


prking 

•ds  of 

1   llio 

liny. 

were 

very 

lluocd 

very 

em- 


ployed in  these  two  great  mining  industries  ;  in  anthracite 
coal  the  increase  in  the  number  of  hands  employed  having 
been  33.2  per  cent,  as  compared  with  an  increase  of  product 
of  82.7 ;  while  in  the  case  of  copper  the  ratios  were  15.8  and 
70.8,  respectively.  For  such  results,  the  use  of  cheaper  and 
more  powerful  blasting  agents  (dynamite),  and  of  the  steam- 
drill,  furnish  an  explanation.  And,  in  the  way  of  further 
illustration,  it  may  be  stated  that  a  car-load  of  coal,  in  the 
principal  mining  districts  of  the  United  States,  can  now 
(1889)  be  mined,  hoisted,  screened,  cleaned,  and  loaded  in 
one-half  the  time  that  it  required  ten  years  previously. 

The  report  of  the  United  States  Commissioner  of  Labor  for 
1886  furnishes  the  following  additional  illustrations  :  — 

"In  tlio  manufacture  of  agricultural  implements,  specific  evi- 
denco  is  submitted,  showing  tliat  six  liundred  men  now  do  the 
work  tliat,  fifteen  or  twenty  years  ago,  would  have  required  2,145 
men, — a  displacement  of  1,545. 

"  Tlie  manufacture  of  boots  and  shoes  offers  some  very  wonder- 
ful facts  in  this  connection.  In  one  large  and  long-establislied 
manufactory  the  proprietors  testify  that  it  would  recpiire  live  hun- 
dred persons,  working  hy  hand  processes,  to  make  as  many  women's 
boots  and  shoes  as  a  hundred  persons  now  make  with  the  aid  of 
machinery,  — a  displacement  of  eighty  per  cent. 

"  Anotlier  firm,  engaged  in  the  manufacture  of  children's  shoes, 
states  that  the  introduction  of  new  machinery  within  the  jiast 
thirty  years  has  displaced  abont  six  times  the  amount  of  liand- 
labor  re(pnred,  and  that  the  cost  of  the  i)roduct  has  been  reduced 
one  half. 

"On  another  grade  of  goods,  the  facts  collected  by  the  agents 
of  the  bureau  show  that  one  man  can  now  do  the  wiU'k  wliicli 
twenty  years  ago  re(piire(l  ten   men. 

"lu  the  manufacture  of  flour  there  has  been  a  displacement  of 
nearly  rhreo  fourths  of  the  manual  labor  necessary  to  produc(>  the 
same  product.  In  the  manufacture  of  furniture,  from  one  half  to 
three  fourths  only  of  the  oM  nund)er  of  jiersons  is  now  required. 
In  the  manufacture  of  wall-paper,  tlie  best  evidence  puts  the  dis- 
l)laeement  in  the  proportion  of  one  hundred  to  one.  In  the  mauu- 
fa(;ture  of  metals  and  metallic  goods,  long-established  firms  testify 
that  machinery  has  decreased  manual  labor  33^  per  cent." 


\  '  \ 


\  j 
•A 


Hi'' 

[i  M 


1:  . 


'Wl 


1 


320 


ECONOMIC  III  STORY. 


I  f' 


In  1845  the  boot  and  shoe  makers  of  Massachusetts  made 
ail  average  production,  under  the  then  existing  conditions  of 
manufacturing,  of  1.52  pairs  of  hoots  for  each  working  day. 
In  1885  each  employe  in  the  State  made  on  an  avoragc  4.2 
pairs  daily,  while  at  the  present  time  in  Lynn  and  Haverhill 
the  daily  average  of  each  person  is  seven  pairs  i)cr  day, 
"  showing  an  increase  in  the  power  of  production  in  forty 
years  of  four  hundred  per  cent."  ^  .  .  . 

But  in  respect  to  no  other  one  article  has  change  in  the 
conditions  of  ])roduction  and  distribution  been  productive  of 
such  momentous  consequences  as  in  the  case  of  wheat.  On 
the  great  wheat-fields  of  the  State  of  Dakota,  where  machinery 
is  applied  to  figricultnre  to  such  an  extent  that  the  require- 
ment for  manual  labor  has  been  reduced  to  a  minimum,  the 
annual  product  of  one  man's  labor,  working  to  the  best  advan- 
tage, is  understood  to  be  now  equivalent  to  the  i)roduction  of 
5,500  bushels  of  wheat.  In  the  great  mills  of  Minnesota,  the 
labor  of  another  one  man  for  a  year,  under  similar  conditions 
as  regards  machinery,  is  in  like  manner  equivalent  to  the 
conversion  of  this  unit  of  5,500  bushels  of  wheat  into  a  thou- 
sand barrels  of  Hour,  leaving  500  bushels  for  seed-purpo.ses  ; 
and,  although  the  conditions  for  analysis  of  the  next  step  in 
the  way  of  results  are  more  dillicult,  it  is  reasonably  certain 
that  the  year's  labor  of  one  and  a  half  men  more  —  or,  at 
the  most,  two  men  —  employed  in  railroad  transportation,  is 
eiiuivalont  to  putting  this  thousand  barrels  of  Hour  on  a  dock 
in  New  York  ready  for  exportation,  where  the  addition  of  a 
fraction  of  a  cent  a  pound  to  the  price  will  further  transport 
and  deliver  it  at  almost  any  port  of  Europe.- 

1  Aildress  by  Mr.  F.  W.  Norcross,  November,  1888,  before  the  Boston  Boot 
and  Slioe  Club. 

-  When  the  wli^at  readies  Xow  York  eity,  and  comes  into  t)ie  possession 
of  a  great  liakor,  who  lias  established  the  manufacture  of  bread  on  a  large 
scale,  anil  wiio  sells  the  best  of  bread  to  the  working-peoiile  of  New  York  at 
tlie  lowest  possible  price,  we  find  that  one  thousand  barrels  of  tlour  can  be  con- 
verted into  bread  and  sold  over  the  counter  by  the  work  of  three  persons  for 
one  year.  Let  us  add  to  the  six  and  a  half  men  already  named  the  work  of 
another  man  six  months,  or  half  a  man  one  year,  to  keep  the  machinery  in  re- 
pair, and  our  modern  miracle  is  that  seven  men  suffice  to  give  one  thousand 
persons  all  the  bread  they  customarily  consume  in  one  year.    If  to  these  we 


CHANGES  IN  TRANSPORTATION. 


321 


m 


a 

i-t 

JOt 


at 

311- 

'or 


Hero,  then,  wo  have  the  labor  of  three  men  for  one  year, 
workiiij;  with  machinery,  resulting  in  the  i)roducing  all  the 
flour  that  a  thousand  other  men  ordinarily  eat  in  a  year, 
allowing  one  barrel  of  flour  for  the  average  consumption  of 
each  adult.  Before  such  a  result  the  question  of  wages  paid 
in  the  different  branches  of  tlour  production  and  transporta- 
tion becomes  an  insignificant  factor  in  determining  a  market; 
and,  accordingly,  American  flour  grown  in  Dakota,  and  ground 
in^Minneapolis,  from  a  thousand  to  fifteen  hundred  miles  from 
the  nearest  seaboard,  and  under  the  auspices  of  men  paid  from 
a  dollar  and  a  half  to  two  dollars  and  a  half  per  day  for  their 
labor,  is  sold  in  European  markets  at  rates  which  are  deter- 
minative of  the  prices  which  Russian  peasants,  Egyptian 
"fellahs,"  and  Indian  "  ryots,"  can  obtain  in  the  same  mar- 
kets for  similar  grain  grown  by  them  on  equally  good  soil, 
and  with  from  fifteen  to  twenty  cents  per  day  wages  for  their 
labor. 

On  the  wheat-farms  of  the  Northwestern  United  States  it 
was  claimed  in  1887  that,  with  wages  at  twenty-five  dollars 
per  month  and  board,  for  permanent  em[)loy(!s,  wheat  could  be 
produced  for  forty  cents  per  bushel ;  while  in  Rhenish  Prussia, 
with  wages  at  six  dollars  per  month,  tlio  cost  of  production 
was  reported  to  be  eighty  cents  per  bi'shel.  .  .  . 

A  great  number  of  other  similar  and  equally  remarkable 
experiences,  derived  from  almost  every  dc])artment  of  indus- 
try except  the  handicrafts,  might  be  presented  ;  but  it  would 
seem  that  enough  evidence  has  been  offered  to  prove  abun- 
dantly that,  in  the  increased  control  which  mankind  has 
acquired  over  the  forces  of  Nature,  and  in  the  increased  utili- 
zation of  such  control  — mainly  through  machinery  —  for  the 
work  of  production  and  distribution,  is  to  be  found  a  cause 
sulVicient  to  account  for  most  if  not  all  the  economic  disturb- 
ance which,  since  the  year  1873,  has  been  certainly  universal 
in  its  influence  over  the  domain  of  civilization, —  abnormal  to 
the  extent  of  justifying  the  claim  of  having  been  unprece- 

aJil  three  for  the  work  of  providing  fuel  and  other  materials  to  the  railroad 
ami  the  balier,  our  final  result  is  that  ten  men  working  one  year  serve  bread 
to  one  thousand,  —  Edwaud  Atkinson,  Distribution  of  Products. 

21 


m 

:ri? 


■m 


\l 


ECONOMIC  HISTORY. 


V  '■' 


dented  in  character,  and  which  bids  fair  in  a  greater  or  less 
degree  to  indelinituly  continue.  Other  causes  may  have  and 
doubtless  liave  contributed  to  such  a  condition  of  alVairs,  but 
in  this  one  cause  alone  (if  the  influences  referred  to  can  be 
properly  considered  as  a  unity)  it  would  seem  there  has  been 
suilicicnt  of  potentiality  to  account  not  only  for  all  the 
economic  i)henomena  that  are  under  discussion,  but  to  occa- 
sion a  feeling  of  wonder  that  the  world  has  accommodated 
itself  so  readily  to  the  extent  that  it  has  to  its  new  con- 
ditions, and  that  the  disturbances  have  not  been  very  much 
greater  and  more  disastrous. 

A  question  which  these  conclusions  will  naturally  suggest 
may  at  once  be  anticipated.  Have  not  these  same  induenccs, 
it  may  be  asl^ed,  been  exerted  during  the  whole  of  the  present 
century,  and  in  fact  ever  since  the  inception  of  civilization ; 
and  are  there  any  reasons  for  supposing  that  this  induence 
lias  been  different  during  recent  years  in  kind  and  degree 
from  what  has  been  heretofore  experienced  '!  The  answer  is, 
Certainly  in  kind,  but  not  in  degree.  The  world  has  never 
seen  anvthing  comparable  to  the  results  of  the  recent  svstem 
of  transportation  by  land  and  water,  never  experienced  in  so 
short  a  time  such  an  expansion  of  all  that  pertains  to  what  is 
called  business,  and  has  never  before,  as  was  promised  at  the 
outset  of  this  argument,  been  able  to  accomplish  so  much  in 
the  way  of  production  with  a  given  amount  of  labor  in  a 
given  time.  Thus  it  is  claimed  in  respect  to  the  (lerman 
Empire,  Avherc  the  statistics  of  production  and  distribution 
have  doubtless  been  more  carefully  studied  by  exports  than 
elsewhere,  that  during  the  period  from  1872  to  1S85  there 
was  an  expansion  in  the  railroad  trallic  of  this  empire  of 
ninety  per  cent ;  in  marine  tonnage,  of  about  a  hundred  and 
twenty  per  cent;  in  the  general  mercantile  or  commercial 
movement,  of  sixty-seven  ])er  cent ;  in  postal  matter  carried, 
of  a  hundred  and  eight  per  cent;  in  telegraphic  despatches, 
of  sixty -one  per  cent ;  and  in  bank  discounts,  of  two  hun- 
dred and  forty  per  cent.  During  the  same  period  ])opula- 
tion  increased  about  eleven  and  a  half  per  cent ;  and  from 
such  data  there  has  been  a  general  deduction  that,  "  if  one 


ClIANaiaS  L\   TliANSPOIiTATIOX. 


323 


hat  is 
at  the 
uch  in 
ov   in  a 
onuan 
butiou 
s  than 
thoi'o 
pirc  of 
ed  and 
nicrcial 
carried, 
latches, 
ivo  hun- 
])opuhi- 
id  from 
"  if  one 


unit  of  trade  was  the  ratio  to  one  unit  of  popuUitiou  in 
(Icrniany  in  1872,  the  proportion  in  18SD  was  more  than 
ten  units  of  trade  to  one  of  popuhition."  IJut,  be  this  as  it 
may,  it  can  not  bo  doubted  that  whatever  has  been  tlic  in- 
dustrial expansion  of  Oerniany  in  recent  years,  it  has  lieen 
at  K-ast  e(iiialled  l)y  Hnj^Iand,  approximated  to  by  France, 
and  certainly  surpassed  ijy  the  United  States.' 

There  is  very  nmeh  that  contributes  to  the  support  of  the 
idea  which  lias  been  sutrgested  by  JM.  Laveleye,  editor  of  the 
"  .Mnniteur  des  lnt(!rets  Alatdriels,"  at  Jh'ussels,  that  the 
industrial  activity  of  the  greater  part  of  this  century  has 
been  devoted  to  fully  equipping  the  civilized  countries  of 
the  world  with  economic  tools,  and  that  the  work  of  the  fu- 
ture in  this  same  sphere  must  be  necessarily  that  of  repair 
and  replacements  rather  than  of  new  constructions.  I>ut  a 
more  impoitant  inference  from  this  same  idea,  and  one  tbat 
fully  harmonizes  with  and  rationally  explains  the  phenomena 
of  the  existing  situation  is  that,  the  equipment  having  at  last 
been  made  ready,  the  work  of  using  it  for  |)roduction  has  in 
turn  begun,  and  has  been  iiroseculed  so  eiliciently  that  tlie 
worlil  has  within  recent  years,  and  lor  the  first  time,  become 
saturated,  as  it  were,  under  existing  conditions  for  use  and 
consumption,  with  the  results  of  these  modern  improvenuMits. 

Again,  although  the  great  natural  laboi'-saving  agencies 
had  been  recognized  and  brought  into  use  many  years  prior 
to  1870,  their  powers  were  long  kept,  as  it  wore,  in  abcyaneo; 
because  it  required  time  for  the  instrumentalities  or  methods, 
by  which  the  world's  work  of  production  and  distribution  was 
carried  on,  to  adjust  themselves  to  new  conditions;  and  until 
this  was  accomplished,  an  almost  infinite  number  and  variety 
of  inventions  which  genius  had  produced  fur  facilitating  and 

'  A  statistical  oxliitiit  of  tlic  prnwtli  of  Rritisli  iiiilii«trial  intcrosts  diiriii}^ 
tlie  rfi(iii  of  (^lu'i'ii  Victorifi  (fifty  years),  piililislicd  in  1887,  in  coniirctiiiii  witli 
tlie  "Queen's  .Jubilee,"  sliowed  tlmt  the  production  of  coal  lias  increased  in 
(ircat  Britain  diiriiiK  tliis  ju'riod  from  .".(i,000,(M)0  tons  to  1 17,000,01)0  tons  per 
aniiuni;  and  tliat  manufactures  had  increased  in  about  an  eciual  ratio  with  the 
output  of  coal  —  that  is  to  say,  hail  about  quadrupled  (fo\ir  hundred  per  cent). 
Meanwhile,  the  population  of  the  United  Kingdom  increased  only  thirty-three 
per  cent. 


M 


•li 


":!l 


M 


;j24 


ECONOMIC  HISTORY. 


: « ,     !i 


accelerating  industrial  evolution  were  matters  of  promise 
rather  limn  of  consuniuiatiun.  I>ut,  with  the  extension  of 
|io|»ul!ir  eduoaliou  ami  the  rapid  dilTusion  of  intellij^encc,  all 
new  aehievenieiits  in  .science  and  art  have  been  brought  in 
recent  years  so  nuicii  more  rapidly  "  within  the  sphere  of  the 
every -day  activity  of  the  people"  —  as  the  nt)ted  (Jcrman  in- 
Nt'Utor,  Dr.  Werner  Siemens,  has  expressed  it —  "  that  stages 
of  devel()i>mrul  which  ages  ago  recpiired  centuries  for  their 
consunjination,  and  which  at  the  beginning  of  our  times 
HMpiired  decades,  now  complete  themselves  in  years,  and 
not  uufre(iuently  present  themselves  at  once  in  a  state  of 
completeness." 

It  shoidd  also  bo  remembered  that  fifty  years  ago  the 
"sciences"  were  little  more  than  a  mass  of  ill-digested  facts 
or  "  unassorted  laws,"  and  that  in  the  departments  of  physics 
and  chemistry  comparatively  little  had  l)een  accomplished 
in  the  way  of  industrial  application  and  direction.  To  say, 
indeed,  what  the  world  diil  not  liaAe  half  a  century  ago  is 
almost  ('(piivalent  to  enumerating  all  those  things  which  in 
their  understanding,  possession,  and  common  use  the  world 
now  regards  as  constituting  the  dividing  lines  between  civili- 
zatidu  and  barbarism.  Tlius,  fifty  years  ago  the  railroad  and 
the  locomotive  wen^  practically  unknown.  The  ocean  steam 
marine  dates  from  lS:5y,  when  tiic  Sirius  and  ( J reat  West- 
ern—  the  two  j)ioneer  vessels — crossed  the  Atlantic  to  New 
York.  Electricity  had  then  hardly  got  "beyond  the  stage  of 
an  elegant  amusement,"  and  the  telegraph  was  not  really 
brought  into  practical  use  before  1844.  The  following  is  a 
further  partial  list  of  the  inventions,  discoveries,  and  ajjpliea- 
tions  whose  initial  point  of  "being"  is  not  only  more  recent 
than  the  half-century,  but  whose  fuller  or  larger  development 
in  a  majority  of  instances  is  also  referable  to  a  much  more 
recent  date:  the  mechanical  reapers,  mowing  and  seeding 
machines,  the  steam  plough,  and  most  other  cminiMitly  labor- 
saving  agricultural  devices  ;  the  IJessemer  process  and  the 
steel  rail  (ISf)!);  the  sul)marino  and  trans-oceanic  tclegrai)h 
cables  (1800  );  photography  and  all  its  adjuncts  ;  electro-plating 
and  the  electrotype  ;  the  steam-hammer,  repeating  and  breech- 


CHANGES  IN   TUANsroiiTATloN. 


325 


loading  firc-anns,  and  rilled  and  strid  cannon;  gnn-t'otton 
and  dynamite ;  llio  industrial  nso  of  Indiu-ruliltcr  and  gutla- 
porclia ;  the  stcani-oxcavator  and  .steani-di'ill ;  liio  sewing- 
niacliinc ;  the  piactical  use  of  tho  electric  li,i;lit;  the  applica- 
tion oi'  dynamic  electricity  as  a  motor  for  machinery  ;  the 
steam  liru-engiuo  ;  the  telephone,  microphone,  spectroscope, 
und  the  process  of  spectral  analysis;  tho  polariscope ;  the 
compound  steam-engine;  the  centrifugal  process  of  refining 
sugar;  tho  rotary  printing-press;  hydraulic  lifts,  cranes,  and 
tdevators  ;  tho  "  regenerative  "  furnace,  iron  and  steel  ships, 
pressed  glass,  wire  rope,  petroleum  and  its  derivatives,  and 
aniline  tlyes  ;  the  industrial  use  of  the  metal  nickel,  cotton- 
seed oil,  artificial  butter,  stearinc-candles,  natural  gas,  cheap 
postage,  and  the  postage-stamp.  Electricity,  which  a  very 
few  years  ago  was  regarded  as  something  wholly  immaterial, 
has  now  ac(piired  a  suiliciently  objective  existence  to  admit  of 
being  manufactured  and  sold  the  same  as  pig-iron  or  leather. 
In  short,  to  one  whoso  present  memory  and  life-experiences 
do  not  extend  over  a  i)erlod  of  time  more  cxtensivi  than 
what  is  represented  by  a  generation,  the  recital  of  the  econ- 
omic experiences  and  industrial  conditions  of  the  generation 
next  preceding  is  very  much  akin  to  a  recurrence  to  ancient 
history.  .  .  . 


■./■ 


'  .  u 


'\\ 


pgi-aph 
nlating 
jrecch- 


:   I    '    5  ! 


326 


ECONOMIC  HISTORY. 


XIII. 


THE  FRENCH  INDEMNITY. 


THE  PAYMENT  OF  THE  FIVE  MILLIARDS. 
Blackwood's  Edinburgu  Magazine,  Feb.  1875,  pp.  172-187. 

AS  soon  as  it  became  known,  five  years  ago,  that  France  had 
to  hand  over  ;£  200,000,000  to  Germany,  it  was  generally 
predicted  that  the  financial  equilibrium  of  Europe  would  be  up- 
set by  the  transfer  of  so  vast  a  sum  from  one  country  to  another, 
and  that  the  whole  system  of  international  monetary  relation- 
ship would  be  thrown  into  confusion.  Apprehensions  of  an 
analogous  nature  were  abundantly  expressed  when  the  two 
French  loans  successively  came  out.  Wise  bankers  shook 
their  heads  in  Frankfort,  London,  Amsterdam,  and  Brussels, 
and  assured  their  listeners  that,  though  the  money  would  prob- 
ably be  subscribed,  it  could  not  possibly  be  paid  up  under  five 
years  at  least.  And  yet  the  whole  of  this  vast  transaction 
was  carried  out  between  1st  June,  1871,  and  5th  September, 
1873  ;  twenty-seven  months  sufficed  for  its  completioii ;  and 
not  one  single  serious  difficulty  or  disorder  was  produced  by 
it.  The  fact  was  that  the  commercial  world  had  no  idea  of 
its  own  power ;  it  thought  itself  much  smaller  than  it  really 
is  ;  it  failed  altogether  to  suspect  that  its  own  current  opera- 
tions were  already  so  enormous  that  even  the  remittance  of 
five  milliards  from  France  to  Germany  could  be  grafted  on  to 
Ihcm  without  entailing  any  material  perturbation.  Such, 
however,  has  turned  out  to  be  the  case  ;  and  of  all  the  les- 
sons furnished  by  the  war,  no  other  is  more  practical  or  more 
strange.  The  story  of  it  is  told,  in  detail,  in  a  special  report 
which  has  recently  been  addressed  by  M.  L<;on  Say  to  the 
Commission  of  the  Budget  in  the  French  Chamber.     It  is  so 


THE  FRENCH  INDEMNITY. 


827 


curious  and  instructive  that  it  is  well  worth  while  to  analyze 
it.  It  may,  however,  be  mentioned,  that  the  order  of  exposi- 
tion adopted  by  M.  Say  is  not  followed  here.  To  render  the 
tale  clear  to  English  readers,  the  form  of  it  is  changed. 

But  before  explaining  the  processes  by  which  the  war  in- 
demnity was  paid,  it  will  be  useful  to  recall  the  principal 
features  of  the  position  in  which  France  was  placed  by 
her  defeat.  It  is  now  computed  that  the  entire  cost  of 
the  campaign  amounted,  directly  und  indirectly,  to  about 
jE 410,000,000 ;  and  this  outlay  may  be  divided  into  five  sec- 
tions, —  the  first  three  of  which  were  declared  ofiicially  by 
the  Minister  of  Finance  in  his  report  of  28th  October,  1873, 
while  the  two  others  have  been  arrived  at  by  a  comparison 
of  various  private  calculations.  They  are  composed  as 
follows :  — 


1. 


2. 


Sums  paid  by  France  for  her  own  military  operations — 

War  expenses  to  the  end  of  1872 £76,480,000 

Food  bought  for  Paris  before  the  siege      ....  6,781,000 

Assistance  to  families  of  soldiers,  etc 2,000,000 

Balance  of  war  expenses  payable  out  of  the  Liquida- 
tion Account         21,942,000 

Total  of  French  expenses  proper        .     .     .  £107,203,000 


Sums  paid  to  Germany  — 

Indemnity         

Interest  on  unpaid  instalments  of  indemnity 
Maintenance  of  German  army  of  occupation 
Taxes  levied  by  the  Germans 


Total  paid  to  Germany 


£200,000,000 

12,005,000 

9,915,000 

2,468,000 

£224,478,000 


3.     Collateral  expenses  — 

Cost  of  issue  of  the  various  war  loans,  rebates  of 
interest,  exchange,  and  cost  of  remitting  the 
indemnity £25,247,000 

Loss  or  diminution  of  taxes  and  revenue  in  conse- 
quence of  the  war 14,567,000 


Total  of  collateral  expenses 


£39,814,000 


W 


!     ! 


I 


Ur 


r 


828 


ECONOMIC  HISTORY. 


4.  ReijuLiitions  in  cash  or  objects  — 

Supplied  by  towns  or  iudiriduals,   including  the 
£8,000,000  paid  by  Paris,  estimated  at      .     .  £15,000,000 

5.  Loss  of  profits  consequent  upon  the  suspension  of  trade  — 

Estimated  at £30,000,000 

R£suM^. 

1 £107,203,000 

2 224,478,000 

3 39,814,000 

4 15,000,000 

5 30,000,000 

General  Total       £416,495,000 

Now,  what  has  France  to  show  against  this  ? 

Her  annual  gains  before  the  war  were  put  by  M.  Maurice  Block 
("Europe,  Politique  et  Sociale,"  p.  317)  at  £900,000,000;  un- 
fortunately he  does  not  tell  us  how  much  of  this  she  spends, 
and  how  much  she  lays  by ;  but  there  is  a  prevalent  impres- 
sion in  France  that  her  annual  savings  amount  to  X80,000,000. 
We  shall  mention  presently  a  calculation  which  seems  to  in- 
dicate that,  during  the  later  period  of  the  Empire,  they  must 
have  amounted  to  a  considerably  larger  sum  than  this  ;  but  if 
we  admit  it,  for  the  moment,  as  correct,  it  would  follow  that 
the  cost  of  the  war,  in  capital,  represented  five  years'  ac- 
cumulation of  the  net  profits  of  the  country.  It  is  not,  how- 
ever, in  that  form  that  a  proportion  can  be  established 
between  liabilities  and  resources ;  the  measurement  must  be 
made,  not  in  capital, but  in  interest;  for  it  ie  of  course,  in  the 
latter  form  alone  —  that  is  to  say,  in  new  taxation  to  pay  in- 
terest on  loans  —  that  France  now  feels  the  pressure.  That 
new  taxation,  when  completed  (it  is  not  all  voted  yet),  will 
amount  to  about  £20,000,000  a  year;  and  that  is  the  real 
sum  which  is  to  be  deducted  from  the  annual  profits  of  the 
country  in  consequence  of  the  war.  Now,  if  tliose  profits 
were  only  £80,000,000,  and  if  they  are  not  progressing,  but 
standing  still  at  their  previous  rate,  this  deduction  would  ab- 
sorb almost  a  third  of  them ;  but  as  they  are  continually  ad- 


THE  FRENCH  INDEMNITY. 


329 


i-s' 


ild  ab- 
,lly  ad- 


vancing —  as  every  branch  of  trade  in  France  is  active  —  as 
foreign  commerce,  which  is  generally  accepted  as  a  safe  test  of 
national  prosperity,  was  one  fifth  larger  in  1873  than  in  18G9 
—  it  may  fairly  be  supposed  that,  after  paying  the  .£26,000,000 
of  war  taxes,  France  is  effectively  laying  by  as  much  as  she 
did  in  the  best  years  before  the  war,  whatever  that  really  was. 

After  this  rough  indication  of  the  situation,  we  shall  better 
understand  the  story  of  the  five  milliards,  it  is  scarcely  pos- 
sible to  disassociate  it  from  the  general  attendant  circum- 
stances of  the  position  as  a  whole  ;  the  two  should  be  kept  in 
view  together. 

The  payment  of  the  indemnity,  and  the  detailed  conditions 
under  which  that  payment  was  to  be  made,  were  stipulated  in 
the  three  treaties  or  conventions  signed  successively  at  Ver- 
sailles, Ferrieres,  and  Frankfort,  in  January,  March,  and  May, 
1871.  It  was  determined  by  the  last-named  treaty  that  "  pay- 
ments can  be  made  only  in  the  principal  commercial  towns  of 
Germany,  and  shail  be  effected  in  gold  or  silver,  in  English, 
Prussian,  Dutch,  or  Belgian  bank-notes,  or  in  commercial 
bills  of  the  first  class."  The  rates  of  exchange  on  coin  were 
fixed  at  3f.  75c.  per  thaler,  or  at  2f.  15c.  per  Frankfort  florin  ; 
and  it  was  agreed  that  the  instalments  should  be  paid  as 
follows :  — 

30  days  after  the  suppression  of  the  Commune     .  £20,000,000 

During  1871 40,000,000 

1st  May,  1872 20,000,000 

2d  March,  1874 120,000,000 

Total       £200,000,000 

The  last  X  120,000,000  were  to  bear  interest  at  5  per  cent. 

It  umst  be  particularly  observed  that  no  currency  was  to 
be  "  liberative "  excepting  coin,  German  thalers,  or  German 
florins.  The  other  forms  of  money  which  the  German  Gov- 
ernment consented  to  accept  did  not  constitute  a  definite  pay- 
ment ;  it  was  not  until  those  other  forms  were  converted  into 
their  equivalent  value  in  thalers  or  in  florins  that  the  pay- 
ment became  "  liberative."  This  was  the  essential  basis  of 
the  bargain. 


-  >  »■*■■ 


m 


'  III 

111 


■*t 


880 


ECONOMIC  HISTORY. 


Furthermore,  it  was  declared  that  the  instalments  must  be 
paid  at  the  precise  dates  fixed,  neither  before  nor  afterwards  ; 
and  that  no  payments  on  account  should  be  allowed.  It  was 
not  till  July,  1872,  that  leave  was  given  to  make  partial  pay- 
ments, but  only  then  with  the  express  reservation  that  such 
partial  payments  should  never  be  for  less  than  j£ 4,000,000  at 
a  time,  and  that  one  month's  notice  of  them  should  be  given 
on  each  occasion.  Under  no  circumstances,  from  first  to  last, 
was  any  payment  permitted  on  account. 

Two  main  conditions,  therefore,  governed  the  operation :  the 
first,  that  all  payments  made  in  anything  but  coin  or  a  proper 
German  form  were  to  be  converted  into  a  German  form  at 
the  expense  of  France ;  the  second,  that  the  proceeds  of  all 
bills  or  securities  which  fell  due  prior  to  the  date  fixed  for 
an  instalment,  were  to  be  held  over  until  that  date.  The 
dates  themselves  were  ultimately  changed, — the  last  payment 
was  advanced  six  months  ;  but,  with  two  special  exceptions, 
those  conditions  were  rigorously  enforced  throughout  the 
entire  business. 

As  the  annexation  of  Alsace-Lorraine  to  the  German 
Empire  obliged  the  Eastern  Railway  Company  of  France  to 
abandon  all  its  lines  within  those  provinces,  it  was  agreed 
that  Germany  should  pay  for  them,  that  the  price  should  be 
£13,000,000,  and  that  this  sum  should  be  deducted  from  the 
indemnity.  This  w.as  the  first  exception.  The  second  was 
that  Germany  consented,  as  a  favor,  to  accept  ,£5,000,000  in 
French  bank-notes.  By  these  two  means  the  £200,000,000 
were  reduced  to  .£182,000,000.  But  thereto  must  be  added 
£12,005,000  for  interest  which  accrued  successively  during 
the  transaction,  and  which  carried  the  total  for  payment  in 
coin  or  German  money  to  £194,065,000.  And  even  this 
was  not  quite  all,  for  France  had  to  furnish  a  further  sum  of 
about  £580,000  for  exchange,  and  for  expenses  in  the  con- 
version of  foreign  securities  into  German  value.  This  last 
amount  does  not  appear  to  be  finally  agreed  between  the  two 
Governments;  there  is  a  dispute  about  it;  but  as  the  differ- 
ence extends  only  to  a  few  thousand  pounds,  the  final 
sum  remitted  may  be  taken  at  about  £194,645,000  or  at 


THE  FRENCH  INDEMNITY. 


881 


.£199,645,000,  if  wc  include  the  ^5,000,000  of  French  bank- 
notes. The  <£13, 000,000  credited  for  the  railways  carried 
the  entire  total  of  the  indemnity,  with  interest  and  ex- 
penses, to  jE  212, 645, 000. 

The  first  payment  (in  French  bank-notes)  was  made  on 
June  1,  1871.  As  the  first  loan  was  not  Ijrought  out  until 
the  end  of  the  same  month,  £5,000,000  were  taken  for  the 
purpose  from  the  Bank  of  France ;  but  with  that  exception 
and  subject  to  temporary  advances  (as  will  be  seen  hereafter), 
the  funds  for  the  entire  outgoing  were  provided  by  the  two 
great  loans;  the  interest  was,  however,  charged  separately 
to  the  budget.  Consequently,  the  money  was  derived  suc- 
cessively from  the  following  sources  :  — 

The  value  of  the  Alsace-Lorraine  railways  .     .  £13,000,000 

Loan  from  the  Bank  of  France 5,000,000 

Out  of  the  first  loan  for  two  milliards     .     .     .  62,478,000 

Out  of  the  second  loan  for  three  milliards   .     .  120,102,000 

Out  of  the  budgets  of  1872  and  1873  (interest)  12,005,000 

Total £212,615,000 

It  is  not  necessary  to  go  into  the  details  of  the  dealings 
with  the  Bank  of  France,  of  the  subscription  of  the  loans,  or 
of  the  dates  and  proportions  of  the  payments  made  upon 
them.  It  will  suffice  to  observe,  as  regards  those  elements 
of  the  subject,  that  though  the  payments  on  the  loans  came 
in,  nominally,  before  the  dates  fixed  for  the  delivery  of  the 
corresponding  instalments  to  Germany,  they,  practically, 
were  not  always  available  in  time.  The  reason  was  that, 
though  the  actual  handing  over  to  Berlin  took  place  at  fixed 
periods,  the  remittances  themselves  were  necessarily  both 
anterior  and  continuous,  their  proceeds  being  accumulated 
by  French  agents  until  wanted.  The  result  was  that  the 
French  jMinistry  of  Finance  was  under  the  necessity  of  mak- 
ing almost  constant  advances  on  account  of  those  remit- 
tances. Each  time  a  payment  was  coming  due,  the  means 
of  effecting  it  had  to  be  arranged  long  beforehand.  It  is 
not  possible  to  collect  or  carry  £20,000,000  at  a  week's 
notice,  so  the  Treasury  was  of  course  obliged  to  keep  on 


832 


ECONOMIC  HISTORY. 


I.i     '"' 


r  ( 


buying  bills  as  fast  as  it  could  get  tlicm,  in  order  to  have  a 
stock  in  hand  for  future  needs.  That  stock  fluctuated  a 
good  deal,  and  there  is  some  contradiction  in  M.  Lcdu  Say's 
report  as  to  its  amount;  but  it  appears,  at  one  period,  to 
have  ranged  for  months  as  high  as  £30,000,000,  ])art  of  the 
cash  to  i)ay  for  it  being  provided  temporarily,  until  the  loan 
moneys  came  in,  either  by  Exchequer  bills  or  by  the  Bank 
of  France  in  notes. 

There  was,  moreover,  towards  the  end  of  the  operation,  an 
advance  made  specially  in  gold  by  the  Bank  of  France;  and, 
as  the  circumstances  under  which  it  was  effected  jtreseut  a 
certain  interest,  it  will  be  worth  while  to  state  them.  In 
May,  1873,  the  French  Treasury  had  before  it  the  obligation 
of  providing  £40,000,000  between  oth  June  and  otli  Septem- 
ber; £24,000,000  of  bills  were  in  hand  for  the  purpose,  and 
about  ,£10,000,000  of  instalments  were  coming  due  on  the 
loan;  but  there  was,  at  the  best,  a  clear  delicit  of  about 
£0,000,000  in  the  resources  available.  The  Bank  of  France 
agreed  to  supjily  that  sum;  but  as,  at  that  very  moment,  the 
circulation  of  its  notes  had  reached  £112,000,000,  and  as  it 
had,  consequently,  only  a  margin  of  £10,000,000  between 
that  figure  and  its  total  authorized  issue  of  £128,000,000,  it 
seemed  dangerous  to  withdraw  £6,000,000  of  that  margin  in 
notes,  and  it  was  decided  to  effect  the  loan  by  preference  in 
gold.  It  is  worth  remarking  that  this  is  probably  the  lii'st 
example,  in  the  history  of  national  banks,  of  a  bank  electing 
to  make  an  advance  in  gold,  as  being  less  "  dangerous  "  than 
the  delivery  of  its  own  notes.  The  French  Treasury  was  of 
course  well  j)lea8ed  to  obtain  bullion,  which  was  immedi- 
ately "liberative,"  instead  of  notes,  which  would  have  had 
to  be  converted  into  bills  at  various  dates.  But,  after  all, 
this  aid  did  not  suflice;  the  incomings  from  the  loan  did  not 
arrive,  practically,  in  time  for  use,  and  the  Treasury  had  to 
supply  a  further  final  balance  of  £9,700,000  to  enable  the 
concluding  payment  to  Germany  to  be  regularly  efleetcMl. 

Finally,  it  may  be  noted  that  there  were  thirty-three  de- 
liveries to  Germany,  the  com[)onent  parts  of  each  of  which 
were  so  scrupulously  verified  by  the  representatives  of  the 


THE  FRENCH  INDEMNITY. 


833 


Berlin  Finance  Department  that  several  days  were  occupied 
by  the  counting,  on  each  occasion.  Indeed,  wlien  thalers 
had  to  bo  told  up,  the  maximum  got  through  in  a  day  never 
exceeded  £32,000. 

After  these  preliminary  explanations  we  can  now  liegin  to 
show  the  means  by  which  the  transfer  was  performed.  We 
will  divide  them,  in  the  lirst  instance,  into  four  categories:  — 

1.  German  bank-notes  and  money  collected  in 

Franco  after  the  war £1,201,000 

2.  French  gold  and  silver 20,'19l»,000 

3.  French  Banknotes 5,000,000 

4.  Bills 109,9J2,000 

Total £199,645,000 

The  first  observation  to  be  made  here  is  that  the  German 
money  found  in  France  amounts  to  a  singularly  large  sum; 
indeed,  if  this  i)roof  of  its  importance  had  not  been  furnished 
no  one  could  possibly  have  suspected  that  the  invatlers,  for 
their  personal  and  private  necessities,  had  spent  anything 
like  so  much.  Their  wants,  as  soldiers,  were  supplied  dur- 
ing the  war,  either  by  stores  sent  from  Germany  or  by  recpii- 
sititms  levied  in  France;  until  peace  was  signed  they  paid 
for  no  objects  of  public  or  official  need;  all  this  cash  repre- 
sented, therefore,  individual  expenditure.  And  manifestly 
the  real  total  nnist  have  been  still  larger.  It  cannot  bo 
8U]>])osed  that  the  whole  of  the  German  money  spent  in 
France  was  reserved  by  its  French  proprietors  for  sale  to 
their  own  Government;  it  maybe  taken  for  granted  tliat  a 
considerable  portion  of  it  went  back  straight  to  Germany 
through  ordinary  channels;  and  it  maybe  guessed  thiif  the 
entire  sum  expended  by  the  e(m(|uerors,  out  of  their  individ- 
ual resources,  in  (Jerman  money,  was  at  least  a  half  more 
than  the  amount  here  shown,  and  that  it  consequently  at- 
tained £0,000,000.  The  questicm  is  curious,  and  this  is  the 
first  time  that  any  ofTieial  information  bearing  on  it  has  been 
published.  It  remains  to  add,  as  regards  this  element  of 
the  jiayment,  that,  as  might  have  been  expected,  the  Germnn 
money  was  included,  almost  entirely,  in  the  earlier  inatal- 


^-  Ul\ 


•■I 


.^4 


Ws.' 


Ill  J 


884 


ECONOMIC  HISTORY. 


mcnts,  and  that  scarcely  any  of  it  appeared  in  the  later 
remittances. 

The  j£  20, 492, 000  of  French  money  wai-  composed  of 
£10,920,000  in  gold  and  X9,572,000  in  silver.  IJiit  it 
should  be  said  at  once  that  these  figures  express  only  the 
amounts  transmitted  by  the  French  Government  oflicially, 
and  do  not  comprise  the  quantities  of  French  gold  bought  by 
Germany  or  forwarded  by  private  bankers  to  cover  their  own 
bills;  these  other  (pumtities  will  be  referred  to  ])re8('ntly. 
iiO,000,000  of  the  Government  gold  were  sujtplied  by  the 
Bank  of  France ;  the  rest  was  bought  from  dealers  or  fur- 
nished by  the  Treasury.  Of  the  silver  £5,810,000  were 
obtained  in  France,  and  .£3,732,000  were  drawn,  in  bars, 
from  Hamburg,  and  coined  in  Paris. 

But  these  direct  remittances  of  German  and  French  cash 
represented  after  all  only  about  one  eighth  of  the  entire  pay- 
ment; the  other  seven  eighths  were  transferred  by  bills,  and 
it  is  in  this  section  of  the  nuxtter  that  its  great  interest  lies. 
It  will  at  once  be  seen  that,  as  no  remittance  in  paper  becanu^ 
"  liberal  ive"  until  it  was  converted  into  an  equivalent  value 
in  thalers  or  in  florins,  the  French  Treasury  could  obtain  no 
receipt  for  an  instalment  until  all  its  various  elements  had 
been  so  converted ;  its  o))ject,  therefore,  was  to  obtain  tlie 
largest  possible  amount  of  bills  on  Germany,  so  that,  at  their 
maturity,  their  proceeds  might  be  at  once  available  in  the 
prescribed  form.  But  at  the  same  time  it  was  quite  im- 
possible to  collect  in  France  alone,  within  the  time  allowed, 
anything  approaching  to  the  quantity  of  German  bills  re- 
quired. The  result  was  that  it  was  found  necessary  not 
only  to  hand  in  a  large  amount  of  bills  on  other  countries, 
which  had  to  be  converted  into  German  values  at  the  cost 
of  France,  but  also,  as  regards  the  ])urchase  of  direct  bills 
on  Germany,  to  effect  it  frequently  in  two  stages.  In  tlu; 
first  stnge  l)ills  were  bought  in  Paris,  as  they  offered,  on 
England,  Belgium,  or  Holland;  in  the  second,  a  portion 
of  the  proceeds  of  those  bills  was  reinvested,  in  those  coun- 
tries, in  other  bills  on  Germany  itself.  Of  course  the 
French  Government  was  very  anxious  to  employ  every  sort 


THE  FRENCH  INDEMNITY. 


335 


ih  cash 
re  ]>ay- 
Is,  and 
si  lies, 
became 
t  value 
ain  no 
iiad 
n  the 
their 
n  the 
im- 
owed, 
s  re- 
f  not 
utries, 
10  cost 
bills 
n  the 
d,   on 
)ortion 
coun- 
c    the 
y  sort 


of  moans  to  increase  the  quantity  of  German  bills,  and  to 
avoid  leaving  to  the  German  Treasury  the  right  of  convert- 
ing foreign  \y^\^(iv  into  German  value  at  French  expense.  At 
the  origin  of  the  operation  the  importance  of  this  element  of 
it  was  not  fully  realized;  but  by  degrees  the  French  minister 
discovered  that  it  was  far  more  advantageous  to  effect  his 
conversions  himself  than  to  leave  them  to  be  carried  out 
anyhow  at  Berlin.  The  result  of  this  discovery  was  that, 
while  j£4r)4,000  were  paid  to  Gerjuany  for  the  cost  of  con- 
version on  the  first  two  milliards,  only  .£11,000  were  paid  to 
her  under  the  same  head  on  the  remaining  three  milliards. 
After  the  experience  of  the  first  twelve  months,  France  sought 
for  bills  on  Germany  wherever  she  aid  get  them  all  over 
Europe ;  and  it  may  be  added  that  she  was  somewhat  aided 
in  the  effort  by  the  sjjecial  position  of  Germany,  who,  at  the 
moment,  was  in  debt  considerably  to  England  not  only  for 
the  war  loans  she  had  issued  there,  but  also  on  commercial 
account  as  well.  But,  as  has  just  been  mentioned,  a  good 
many  of  these  bills  were  substitutions  for  each  other,  and 
consequently  the  amount  of  paper  shown  as  bought  is  con- 
siderably larger  than  the  real  sum  paid  to  Germany,  the 
reason  being  that  a  good  deal  of  it  appears  in  the  account 
twice  over.  The  following  table  gives  the  composition  of 
the  total  (piantity  of  bills  bought  by  France :  — 

Bills  on  Germany,  bought  direct,  in  thalers     .  £02,550,000 

"      "          "              "           "        in  florins      .  9,518,000 
"      "         "          bought,  in  thalers,  with  the 

proceeds  of  other  bills      .  42,218,000 

"      "         "          in  rt'ichsmarcs 15,172,000 

"      "   England,  in  sterling 01,780,000 

"      "  Hamburg,  in  niarcs-banco     ....  21,432,00!) 

"      •'  Belgium,  in  francs 2n.8.")0,OOO 

"      "  Holland,  in  florins 12,9.')2,000 

Total £234,508,000 

These  bills  were  paid  for  mainly  in  French  bank-notes; 
and  the  average  rates  of  exchange  at  which  they  were  bought 
came  out  as  follows,  for  the  entire  operation :  — 


■i 


■41 


■\&  'It 


i) 


^  f 


:]% 


336  ECONOMIC  HISTORY. 

Fnnoi. 

Thalers 3.71)10 

Pounds  sterling 25.4043 

Marcs-banco 1.0089 

Belgian  francs 1.0001 

Dutch  fieri n.s 2.1500 

Frankfort  florin.s 2.1037 

Keichsmarcs 1.2528 

Every  one  at  all  acquainted  with  oxchangps  will  recognize 
how  low,  luulcr  such  circumstances,  these  prices  are;  and 
will  ask,  with  wonder,  how  they  can  have  been  kept  down  to 
such  averages  on  so  large  an  undertaking. 

But  though  the  foregoing  table  shows  the  quantities  of 
bills,  of  each  kind,  that  Avere  bought  by  the  French  Govern- 
ment as  vehicles  of  transmission,  it  in  no  way  indicates  the 
form  in  which  the  money  was  in  reality  handed  over  to  the 
German  Treasury.  IMost  of  the  above  figures  Avcro  largely 
modified  by  conversions  and  substitutions;  and  when  all  the 
bills  had  been  cashed,  when  the  whole  payment  had  been 
effected,  it  appeared  that  the  real  totals  of  each  sort  of  cur- 
rency which  had  been  finally  delivered  to  Germany  were  as 
follows :  — 

French  bank-notes £5,000,000 

"      gold 10,02(1,000 

"       silver 9,572.000 

German  notes  iind  cash 4,201,000 

Bills  — Thalers 90,412,000 

"    —Frankfort  florins 9,101,000 

"    —Mares-banco 10,008,000 

•'    —Keichsmarcs 3,100,000 

"    —  Duteii  florins 10,020,000 

"    —(and  in  silver)  — Belgian  francs      .     .  11,828,000 

«'    —Pounds  sterling 25,400,000 

Total £199,045,000 

This  catalogue  shows  at  last  in  what  shape  the  bills  were 
really  utilized  and  made  "liberativc,"  either  in  German 
money  direct,  or  by  the  equivalent  of  foreign  value  in  thalers 
or  florins.     The  differences  of  composition  between  this  defi- 


':-*i 


u 


THE  FRENCH  INDEMNITY. 


337 


and 


nitivc  list  and  that  of  the  bills  originally  bought  arc  only 
partially  explained  by  M.  Ldon  Say ;  it  is  not,  however, 
necessary,  nor  would  it  be  interesting,  to  follow  out  precisely 
the  various  conversions  which  took  place ;  we  will  only  men- 
tion, as  an  illustration,  that  out  of  the  £01,780,000  of  original 
bills  in  England  <£;U,687,000  were  converted  here  into  other 
bills  on  ^Germany,  that  .£25,490,000  were  sent  to  Berlin  in 
sterling  bill,  and  that  the  balance  remains  unexplained.  As 
regards  the  direct  delivery  by  Franco  herself,  of  English, 
Belgian,  or  Dutch  bullion,  the  report  says  nothing;  it  is 
only  stated  incidentally  that  £720,000  of  Belgian  francs 
were  sent  to  Berlin  in  metal,  and  that  the  London  agency  of 
the  French  Treasury  bought  £1,132,000  here  in  gold  and 
silver,  which  probably  was  also  shipped  to  Berlin  ;  but  these 
are  the  sole  allusions  to  the  subject.  It  is  probable,  as  in- 
deed has  always  been  supposed,  that  the  bullion  which  was 
withdrawn,  during  the  operation,  from  London,  Brussels, 
and  Amsterdam,  was  not  taken  for  French  account,  but  by 
Germany  out  of  the  sums  at  her  disposal  in  each  place  after 
the  bills  on  that  place  had  matured. 

We  have  now  before  us,  in  a  condensed  form,  the  main 
elements  of  this  prodigious  operation  ;  we  see  now  what  were 
the  conditions  which  regulated  it,  where  the  money  came 
from  to  realize  it,  how  that  money  was  successively  employed, 
and  in  what  shapes  the  payments  were  at  last  effected. 

We  recognize  that  France  herself  provided,  in 

her  own  notes  and  coin  .     .     .       £25,492,000 

•«         •«        that  German  money  and  bills  on 

Germany  produced   ....       120,815,000 

••  "         that  hills  on  England,  Belgium, 

and  Holland  contributed     .     .         47,338,000 


were 
:'rman 
llialers 

defi- 


Total £199,645,000 

Here,  however,  wc  must  repeat  that  the  Paris  bankers  who 
sold  drafts  on  Germany  were  obliged  to  some  extent  to  remit 
cash  to  meet  them.  On  this  point  M.  Leon  Say  goes  into 
calculations  which  we  will  mention  presently;  for  the  mo- 
ment it  will  suffice  to  say  that,  according  to  his  view,  the 

22 


m 


H-  r 


Uiti    '         f 


888 


ECONOMIC  HISTORY. 


t'fft'ctivc  transmission  of  bullion  from  Franco  to  Germany, 
tliroiiKli  privah!  hands,  from  1871  to  1873,  did  not  exceed 
jCH,OO(),000  for  the  purposes  in  viewliere.  He  acknowledges, 
as  will  be  seen,  that  the  entire  exportation  of  French  gold 
during  the  three  years  reached  (probably)  jC 40, 000, 000;  but 
still  ho  ex|)resses  the  opinion  that  <iC8, 000,000  were  all  tliat 
was  required,  as  a  balance,  to  cover  the  Frendi  bills  on 
Berlin.  Of  course  this  is  a  (piestion  which  nobody  can  de- 
cide; but,  to  lookers  on,  it  does  seem  somewhat  contrary  to 
tlic  probabilities  of  such  a  case  that  this  sum  can  luive  been 
suflicient.  It  may,  perliaps,  have  been  enougli,  as  M.  Say 
says,  to  balance  accounts  in  the  long  run,  but  it  is  dillicult 
to  believe  that  it  was  not  considerably  exceeded  while  the 
operation  was  under  cxecuticm.  Furthermore,  M.  L(^on  Say 
makes  a  mistake  of  .£10,000,000  in  liis  account,  as  we  shall 
sli(»w,  and  for  that  reason,  wo  belicvo  that  j£  18, 000, 000 
instead  of  .£8,000,000  were  required,  so  putting  the  whole 
total  of  French  bullion  temporarily  used,  including  the 
.£20,000,000  of  the  Government,  at  about  £38,000,000,  or 
a  little  more  than  one-sixth  of  the  entire  sum  to  pay.  As 
this  is  certainly  a  maximum,  it  follows  that  France  got  out 
of  this  great  debt  with  a  payment  of  only  18  per  cent  of  it, 
at  the  outside,  in  her  own  money.  And  there  is  good  rea- 
son to  suppose  that  all  the  gold  exported  by  her  has  come 
back,  and  that  her  reserves  of  bullion  are  reconstituted  at 
present  as  they  were  before  the  war. 

And  now  we  can  approach  the  most  important  and  inter- 
esting point  in  the  whole  transaction.  IIow  came  it  that 
i;  170, 000, 000  of  bills  could  be  got  at  all  ?  We  have  given  a 
general  answer  to  the  question  at  the  commencement  of  this 
article;  we  will  now  consider  it  more  in  detail,  partly  with 
the  aid  of  ^f.  Leon  Say's  report,  partly  by  reference  to  other 
sources  of  informatiim.  It  appears,  as  might  have  been  ex- 
pected, that  various  measures  were  employed  by  the  French 
Government  in  order  to  render  possible  the  collection  of 
such  a  huge  mass  of  paper.  In  the  first  place,  particula 
facilities  and  temptations  were  offered  to  foreigners  to  in 
duce  them  to  subscrilic  to  the  two  loans;  commissions  vary- 


TIfE  FRENCH  IX  DEM  MTV. 


339 


\n\t,  Iroin  J  lot  per  (H'lit  were  ofTcrctl  (o  tlicm,  the  ()l>j<,H't  \n\- 
iiig  to  U(:(|iiir(i  llu!  powci'  of  drawiiijf  on  tlicm  lor  the;  aiuount 
of  their  iiistahnt'iilrt.  Secondly,  cverylhini^  wuh  done  to  en- 
courage anticipated  payincntH  oi'  those  inrttalnicntrt,  ho  as  to 
liastcn  tlie  dales  at  whieh  they  eoiild  Im  diawn  lor.  Thirdly, 
art  some  fear  was  felt  that  the  second  loiin  lui^dit  |M)Hsildy  not 
he  eag('rly  siil)seril)ed,  ct)ining  as  it  did  so  iinniedialely  alter 
a  previous  issue  which  was  not  quite  paid  up,  it  was  thought 
desirahle  to  get  a  portion  of  it  guaninteed  hy  hankers.  Ihit 
in  order  not  to  risk  giving  to  those  hankers  a  largt;  connnis- 
sion  for  nothing,  it  was  stipulated  with  them,  as  a  part  of 
tlu!  arrangement,  that  they  should  supply  tin;  Treasury  with  a 
fixed  quantity  of  foreign  hills.  By  the  two  former  plans  of 
action  the  immense  amount  of  <£7O,92(),O00  of  drafts  on 
other  countries  was  ohtained,  £1  "),0t50,0()0  of  which  were  on 
account  of  the  first  loan,  and  ii')4,9ti(),000  on  account  of  tlu; 
second;  and  it  may  he  remarked  at  once,  hefore  we  proceed, 
that  though  this  figure  supplies  decisive  evidence  of  the  fact 
that  at  least  one  third  of  the  two  great  loans  was  paid  uj) 
hy  foreign  suhscril)ers,  it  is  certain  that  nearly  tin;  entire 
au'iount  has  heen  bought  hack  since,  and  that  almost  the 
whole  of  the  new  stocks  is,  at  the  present  moment,  in  French 
hands.  By  the  third  plan  the  hankers  who  formed  fh(!  syn- 
dicate, and  it  may  he  mentioned  that  fifty-five  of  \\w.  first 
houses  in  Eiu'opc'  were  associated  for  the  purpose,  euiraged 
tn  supply  £28,000,000  of  paper.  C(Hise(pi(Mitly,  hy  these 
admiral)ly  devised  scliemes,  £98,920,000  of  drafts  were 
successively  procured,  and  the  exact  quantity  to  he  bought 
in  the  open  market  was  reduced  to  £71.0:12,000. 

It  must,  however,  be  observed  that,  though  we  can  regard 

these  drafts  on  foreign  countries  for  loan  instalments  as  a 

special  product  of  the  occasion,  and  are  therefore  justifi(>d  in 

cniuiting  them  apart,  the  same  cnnnot  anyhow  be  said  of  the 

28.000,000  of  bills  furnished  by  the  syndicate  of  bankers. 

"he   latter  were    evidently    composed    of  ordinary  coinmer- 

•'\\   paper,   and    conseqjiently  must  be  added  to   the   total 

which  had  to  be  su|)j)lied  from  commercial  sources  proper, 

80  letting  that  total  at  £99,032,000.     Now  bills  of  this 


%> 


in  ." 


If    '    :'- 


■Hi 


•„|ll 
'1 


3J0 


ECONOMIC  HISTORY. 


sort  necessarily  imply  an  effective  counter-value  of  some 
kind;  so,  as  we  have  already  seen  that  at  the  otitsidc  only 
.£18,000,000  of  that  counter-value  was  sujjplied  in  bullion, 
there  remained  at  least  <£81,03l\000  of  bills  which  must 
necessarily  have  been  based  on  ordinary  trading  or  financial 
operations.  What  were  those  oj)eration8?  Veiy  often  the 
general  character  of  a  bill  is  indicated  on  its  face;  but  in 
this  case  a  test  of  that  kind  could  not  be  ajjplied,  not  only 
because  there  were  so  many  bills  to  handle  that  a  serious  ex- 
amination of  their  nature  was  impracticable  (there  were  in 
all  one  hundred  and  twenty  thousand  of  them,  of  every  con- 
ceivaljle  amount,  from  ,''-40  to  £200,000),  but  also  because 
every  jiossible  kind  of  business  transaction  must  have  been 
reijresented  in  that  accinnulation  of  securities  from  all  ])aris 
of  th'' world.  Bank  credits,  circulation  bills,  settlements  for 
goods  delivered,  remittances  on  account  of  future  purchases, 
drafts  against  the  coupons  of  shares  and  stocks,  special  paper 
created  for  the  occasion, —  all  these  forms,  and  many  others, 
too,  were,  according  to  M.  Ldon  Say,  incliuled  in  the  collec- 
tion. It  was  not  possible  to  seek  out  in  detail  the  origins  and 
meanings  of  such  a  varied  mass ;  liiit  we  may  take  ]\r.  Say's 
general  description  of  it  to  be  true,  not  only  because  it  cor- 
ros])onds  with  probabilities  and  e.\i)erience,  but  .dso  because 
he  was  himself  Minister  of  Fin<ince  during  a  part  of  the 
operation,  and  has  therefore,  a  personal  knowledge  of  its 
main  circiunstances.  Researches,  however,  which  could  not 
be  attempted  with  the  bills  themselves,  may  be  practically 
and  usefully  pursued  if  they  are  directed  towards  the  general 
signs  and  symptoms  of  the  financial  state  of  France.  It  is 
prol)able  that  a  relatively  small  amount  of  bills  was  created 
specially  to  be  sold  to  the  French  Ciovernment.  We  may, 
indeed,  take  the  supposed  £18,000,000  of  exported  bullion 
as.  indicating  the  apjtroximate  extent  of  uncovered  or 
manufactured  paper;  all  the  rest  was  evidently  Itascd  on 
mercantilo  transactitms.  Now,  we  know  that  mercantile 
transactions  imjily  the  delivery  of  pro))crty  of  some  kind, 
and  that  the  two  main  forms  of  propert; ,  commercially,  arc 
merchandise  and  stf»"ks.     It  is  therefore  necessary,  in  order 


THE  FRENCH  INDEMNITY. 


341 


to  arrive  at  an  idea  upon  the  question,  to  <;lance  at  the  ae- 
tual  position  of  France  in  her  dealings  witli  other  nations  in 
these  two  values. 

We  have  already  alluded  to  the  development  of  French 
trade,  and  to  the  general  inlluence  of  that  development  on 
the  payment  of  tlie  war  indenmity  as  a  whole;  but  we  must 
go  into  a  few  figures  here  in  order  to  make  the  bearings 
of  the  subject  clear.  The  value  of  the  foreign  commerce 
of  France  —  importations  and  exportations  together  — 
was  £207,000,000  in  1871,  i: "203, 000, 000  in  1872,  and 
£301,000,000  in  1873.  Now  it  will  be  at  once  recognized 
that  the  amount  of  bills  necessitated  by  this  quantity  of 
commerce  supplied  a  solid  foundation  for  carrying  the  addi- 
tional paper  whose  origin  we  are  now  seeking  to  discover. 
M.  Say  is  of  opinion  that  scarcely  any  part  of  the  indemnity 
bills  was  furnished  by  the  current  cinnmercial  trade  of  the 
country;  but,  as  wc  have  just  seen  that  the  (pumMty  n;quired 
from  trading  sources  was  £81,000,000,  or  about  £40,000,000 
per  annum,  it  does  seem  to  be  possil)le,  notwithstau<liiig  his 
contrary  imj)ression,  that  some  portion  of  that  relatively 
reduced  quantity  nuiy  have  been  found  in  the  ordinary  com- 
mercial movement.  For  instance,  it  may  reasonably  1)0 
argued  —  as  iudci'd  M.  Say  liimself  admits  —  that  bills 
drawn  against  French  exports  to  (Germany  or  England  would 
bo  included,  to  some  extent,  among  those  which  were  olTcnMl 
to  the  Government.  There  seems  to  be  no  reason  why  this 
should  not  have  been  so. 

JJut  if  M.  Say  considers  that  the  habitual  cnmm(M-cial 
paper  of  France  has  not  been  of  much  servic(>  to  the  'i'reas- 
ury  in  its  cimduct  of  this  operation,  he  IntKIs  a  totally  dilTer- 
ent  opinion  with  reference  to  the  influence  of  th(>  foiciuii 
investments  of  the  French  people.  What  he  says  on  this 
subject  is  new  and  curious,   and   is  well  worth  repeatiuL'. 

He  begins  by  statinir,  with  an  ap]»earanee  of  nmch  truth 
and  reasim,  that  for  many  years  b(>i"on'  the  war,  Freiu'h 
capital  was  being  ctmtinuously  invested  in  foreign  securities; 
that  the  sums  bo  placed  have  been  estimated  Ity  different 
economists  at   from  £30,000,000  to   £00,000,000  a  year. 


342 


ECONOMIC  HISTORY. 


H(?rc,  however,  before  wc  follow  out  his  argument,  we  must 
open  a  parenthesis,  and  observe  that  if  even  the  smaller  of 
tliose  ligures  is  exact,  the  computation  of  ^E 80, 000, 000  of 
annual  savings,  which  was  alluded  to  at  the  commencement 
of  this  article,  must  be  altogether  wrong.  It  is  manifestly 
inadmissible  that  France  can  have  been  investing  in  foreign 
countries  three  eighths  of  lier  whole  net  yearly  profits. 
Consecpiently,  we  may  legitimately  suppose  that  the  popular 
impression  about  the  ^£80,000,000  is  a  delusion,  and  that 
France  is  in  reality  laying  by  a  vast  deal  more  than  that. 
If  so,  the  ease  and  speed  with  which  she  has  recovered  from 
the  war  would  be  comprehensibly  cxj)laincd.  M.  Ldou  Say 
goes  on  to  tell  us  that  French  investments  in  foreign  stocks 
amounted  in  1870  to  so  large  a  total  that  the  dividends  on 
them  represented,  at  that  date,  about  ^fG,  000, 000  a  year, 
for  which  sum  drafts  on  other  countries  were  of  course  put 
into  circulation  by  its  French  proj)rietors.  Furthermore, 
the  revenues  of  the  strangers  who  live  in  Franco  come  to 
them  princi|)ally  from  their  own  country;  and  it  is  estimated 
tliat  before  the  war  £10,000,000  or  £12,000,000  of  such 
inconics  were  drawn  for  annually  in  the  same  way.  Conso- 
(pieiitly,  on  this  showing  it  would  api)ear  that  somewlicre 
about  'i::3r),000,000  or  £40,000,000  of  French  drafts  on  for- 
eign countries  were  created  every  year  from  those  two 
sources.  It  is,  however,  certain  that  this  quantity  has 
dimini.shed  since  the  war,  by  the  departure  of  some  of  the 
strangers  whr)  used  to  live  in  France,  and  also  hy  the  sale, 
in  order  to  provide  funds  for  subscriptiim  to  the  two  new 
loiins,  of  some  of  the  foreign  securities  held  in  France.  JJut 
M.  I/on  Say  considers  that  the  annual  diminuticm,  on  both 
III  ads  togetlKM"  does  not  exceed  £4,000,000,  and  tliat  at  least 
C.O, ()()(), 000  of  paper,  rei)resenting  cash  due  to  France  (m 
a<-eount  of  ineoines  from  abroad,  irrespective  of  commerce 
projierly  so  called,  were  drawn  in  1871  and  1872.  In  sup- 
port of  these  eonaiderati(ma,  he  mcMitiona,  among  other 
facts,  tliat  in  18r)S  and  18»;n  the  coupons  paid  in  Paris  on 
Italian  stock  alone  amounte<l  to  £3,400,000;  wliile  in  1872 
and  1873  they  fell  to  £2,400,000.     On  this  one   security, 


THE  FRENCH  INDEMNITY. 


848 


therefore,  which  is,  however,  probably  held  in  France  in 
hirger  proportions  than  any  other  foreign  stock,  the  diminu- 
tion of  income  since  the  war  amounts  to  .£1,000,000.  With 
these  figures  and  probabilities  before  him,  he  concludes  by 
cxi)ressing  the  confident  opinion  that,  as  French  purchases 
of  foreign  stocks  have  ceased,  to  a  great  extent  at  least,  since 
1870,  and  as  remittances  of  French  money  to  pay  for  such 
purchases  have  consequently  ceased  as  well,  the  drafts  on 
other  countries  for  coupons  and  revenues  became  entirely 
disposable  for  transmission  to  J3erlin,  and  that  it  is  here  that 
the  main  explanation  lies  of  the  facility  with  which  the 
bills  were  found.  This  theory  is  ingenious,  and  it  is  proba- 
bly in  great  part  true. 

Tiie  movement  of  the  precious  metals  forms  a  separate 
element  of  the  subject,  and  one  that  is  not  easy  to  trace  out; 
for  in  France,  as  in  most  other  countries,  the  public  returns 
of  the  international  trade  in  sjiecie  are  very  incomplete. 
We  know  how  much  gold  and  silver  are  raised  from  mines, 
and  how  much  thereof  is  coined  by  each  country;  but  we  are 
very  ill  informed  as  to  what  becomes  of  them  when  once  they 
have  issued  from  the  mint.  On  this  head  also,  however,  M. 
Ldon  Say  has  collected  some  valuable  facts.  The  Custom- 
house Reports  inform  us  that  during  tlie  three  years  from 
1871  to  1873  £53,400,000  of  bullion  were  exported,  and 
=£50,480,000  were  imported;  on  this  showing,  therefore,  (ho 
loss  of  bullion  was  only  £2,020,000.  But  as  private  int'or- 
mation  gave  good  reason  to  believe  that  the  auiounts  nuist 
luive  been  in  reality  ecmsiderably  larger,  calculations  have 
l)een  made  in  ord<>r  to  arrive  at  a  more  correct  conclusion. 
It  appears,  from  ofTicial  ))ublioatious,  that  the  stock  of  gold 
and  silver  in  the  (/iiristinu  world  i^  si.|ti)0sed  to  have  in- 
creased l)y  £371,000,000  fr.wu  1H4!)  to  1H()7;  but  the  aug- 
mentation has  not  occurred  in  both  the  metals,  it  has  taken 
j)lace  in  gold  only;  the  quantity  of  gold  is  greater  by 
£428,000,000,  while,  in  consequence  of  exportations  to 
Asia,  the  quantity  of  silver  has  diminished  by  £57,000,000. 
Xow  out  of  this  £428,000,000  of  new  gold,  France  alone,  in 
the  first  instance,  received  more  than  half;  at  least  we  arc 


i    si ; 

i!(| 

r 


844 


ECONOMIC  HISTORY. 


justified  in  supposing  so,  from  the  fact  that,  during  the  same 
period  the  Paris  mint  converted  £230,000,000  of  bar  gold 
into  French  coin.  Of  course  this  quantity  of  gold  did  not  re- 
main permanently  in  Prance ;  its  whole  value  was  not  added 
in  reality  to  the  general  French  stock  of  motal;  as  gold 
arrived  in  France  silver  went  away;  indeed  it  is  imagined 
that,  out  of  the  £200,000,000  of  silver  which  have  been  coined 
in  France  since  the  year  1800  only  £40,000,000  remained 
in  the  country  in  1809.  It  is,  however,  calculated  that  the 
£100,000,000  of  hard  cash,  gold  and  silver  together,  which 
were  said  to  really  belong  to  France  in  1848,  have  doubled 
since;  and  M.  Wolowski,  who  is  regarded  as  an  authority 
on  such  questions,  declared  in  the  French  Chamber,  on  4th 
February  last  that,  in  his  ojjinion,  the  national  stock  now 
ranges  between  £200,000,000  and  £2r)0,000,000. 

But  whatever  be  the  interest  of  these  computations,  and 
useful  as  it  nuiy  be  to  count  up  the  amount  of  bullion  which 
luxs  come  into  France,  we  must  look  elsewhere  for  informa- 
tion as  to  the  quantity  of  it  which  the  conse(iuence8  of  the 
war  took  oiit.  We  know  that  the  German  mint  melted 
down,  for  its  own  coinage,  £33,880,000  of  French  napoleons. 
It  is  also  known,  says  ^f.  Ldon  Say,  that  the  Bank  of  Eng- 
land bought  nearly  £8,000,000  of  the  same  sort  of  money 
between  1870  and  1873.  Here,  therefore,  wo  can  trace  the 
passage  out  of  France,  since  the  war,  of  nearly  £42,000,000 
of  her  gold.  But,  as  Clcrmany  drew  from  Loudon  £1,080,000 
of  the  napoleons  which  she  put  into  the  furnace,  it  may  be 
that  that  sum  was  included  in  the  £8,000,000  of  the  Bank 
of  England,  and  is  therefore  counted  twice.  For  this  reason 
the  amount  renlly  sent  to  Genuany  and  England  may  be  put 
at  £40,000,000.'  M.  Ldon  Siiy  adds,  that  the  Bank  of  Am- 
sterdam l)ought  a  further  £3,000,000  of  French  gold;  but, 
as  he  fancies  thai  this  may  not  have  come  direct  from 
Franco,  he  does  not  add  it  to  the  total,  and  he  holds  to 
£40,000,000  as  representing  probably  the  effective  loss  of 
gold  which  France  had  to  support  af;«"'r  the  war.  Of  ih's 
sum  £10,920,000  were  exported  to  Bclin,  as  we  have  al- 
ready shown,  by  the  French  Government  itself;   the  other 


THE  FRENCH  INDEMNITY. 


345 


£29,080,000  were  consequently  carried  out  by  private  firms 
for  transmission  to  Berlin,  and  for  various  other  purposes. 
Silver,  however,  arrived  in  considerable  (luantities  U)  replace 
the  gold.  <£9, 500,000  of  silver  were  coined  in  l*aris  be- 
tween 1870  and  1873;  and  the  Custom-house  returns,  which 
are  almost  always  below  the  truth,  show  an  importation  of 
£12,1(10,000  of  it.  From  all  this,  M.  Say  eoueliules  that 
£40,000,000  of  gold  left  France;  that  £12,000,000  of  silver 
came  to  her;  and  that  the  £28,000,000  of  difl'erence  between 
the  two  rej)resents  the  real  total  loss  of  bullion  which  the 
war  entailed. 

But  in  making  this  calculation  M.  Ldim  Say  commits  a 
most  wonderful  mistake;  he  entirely  cmiits  to  take  accoimt 
of  the  £9,.'i72,000  of  silver  which  the  French  fJovernment 
sent  to  Berlin,  and  which  must,  of  coiu'se,  be  iuMed  to  the 
out-going.  When  this  strange  error  is  corrected,  the  loss 
becomes,  not  £28,000,000,  but  £38,000,000,  of  which  the 
Government  exported  £20,000,000,  leaving  aitpnrently 
£18,000,000  instead  of  £8,000,000,  as  the  sum  crmliibiited 
by  private  bankers.  Thit,  ditTerence  of  £10,000,000  in  the 
issue  of  the  calculation  gives  some  value  to  another  com- 
putation which  M.  Leon  Say  has  made,  but  which  woidd 
have  had  no  foundaticm  if  tliis  error  had  not  (>.\isted.  \h\ 
says,  prol)ably  with  some  truth,  thirt  the  (piantity  of  money 
in  circulation  in  a  coimtry  remains  usually  at  the  same 
general  total  during  the  same  period,  whatever  l)e  the  nalun^ 
of  the  various  elements  wliich  cimipose  it.  fh'  then  goes 
on  to  argue  that  as  the  issue  of  Freiu^h  bank-notes  was 
£44,000,000  higher  in  September,  1873,  than  in  June,  1870, 
tluit  increase  ought  to  approximately  indicate  the  amount  of 
metal  withdrawn  in  the  interval  from  circulation,  and  re- 
placed by  notes.  But  according  to  his  theory,  that  amount 
of  metal  did  not  exceed  £2S,000,000,  leaving  an  excess  of 
£10,000,000  of  notes,  which  excess  he  exi)lains  by  saying 
that  it  represents  an  equal  sum  in  gold  which  the  French 
people  had  hidden  away.  Now  everybody  knows  that  the 
lower  classes  of  the  French  people  do  hide  mcmey,  do 
" thesaurise, "  as  they  say;  but  such  an  explanation  of  the 


,r.' 


,  f?i 


.'A\ 


ail 


. 


346 


ECONOMIC  IIISTOUr. 


Si.?*         '<■ 


) 


missing  .£16,000,000  is  so  purely  imaginary  that  it  cannot 
merit  any  serious  credit.  The  theory  assumes,  lu)\vever,  a 
very  dill'erent  form  when  the  error  of  the  .£10,000,000 
is  coi-rected.  In  that  case  wo  have  an  extra  issue  of 
jE 44, 000, 000  in  banli -notes,  corresponding  to  a  loss  of 
£3^,000,000  in  gold  and  silver;  and  tliere  the  two  figures 
get  sulHciently  close  to  each  other  for  it  to  be  possible  that 
there  really  is  some  relationship  between  them,  without  be- 
ing forced  to  resort  to  the  possible  but  improbable  solution 
of  thesaurising. 

Consecpiently,  with  all  these  various  considerations  be- 
fore us,  it  seems  reasonable  to  suppose  that  the  natures  of 
the  bills  employed  to  pay  the  war  iiulemnity  were  of  <hreo 
main  classes,  and  were  grouped  approximately  in  the  follow- 
ing proportions:  — 

Drafts  for  fiireign  subscriptions  to  tlie  loans     .  £70,020,000 

IJills  .against  French  bullion  siieci.-illy  exjiorted  18,000,000 
Cominorcial  bills  and  drafts  for  dividends  and 

revenues  from  abroad 81,032,000 


General  total  of  bills £109,952,000 

Before  we  j)roceed  to  sum  up  the  case,  and  to  try  to  draw 
from  it  the  teaching  it  contains,  there  is  one  more  detail 
which  is  worth  explaining. 

AVe  have  alluded  to  the  coining  in  Paris  of  a  certain  quan- 
tity of  Hamburg  silver.  To  make  the  story  of  it  clear,  it  is 
necessary  to  remind  our  readers  that,  according  to  the  ccm- 
stituticm  of  the  Banli  of  Ilaujburg,  which  dates  from  1019, 
accounts  were  kejit  by  it  in  a  money  called  mai'c-banco,  and 
credits  were  opened  by  it  in  that  money  on  the  dt'posit  of 
silver,  coined  or  uncoined,  the  value  of  that  silver  being 
calculated  pure.  By  degrees  the  marc-banco,  though  only  an 
iniiigiuiiry  money,  grew  to  be  the  universal  denominator  em- 
ployed in  the  home  and  foreign  business  of  IJamluirg;  it  ac- 
(piired  an  importance  greater  tiian  that  of  the  etl'ective  money 
of  many  filerman  States.  But  when  the  Em|)ire  was  estab- 
lished, and  it  was  decided  to  introduce  a  gold  standard  into 
CJermany,   it  became  essential  to  suppress  the  marc-banco, 


THE  FRENCH  INDEMNITY. 


847 


for  it  had  the  double  defect  of  representing  silver  and  of  form- 
ing a  separate  value  outside  CJernian  monetary  unity.  So  it 
was  abolished  by  law  and  ordered  to  disappear,  —  the  plan 
adopted  being  that  the  l>ank  of  Hamburg  should  li(piidato 
its  deposits  by  paying  olT,  in  i)ure  silver,  the  marcs-banco  in 
circulation.  It  was,  however,  stipulated  that  this  right 
should  cease  on  loth  February,  1873,  and  that  after  that 
day,  all  perstms  who  held  securities  in  marcs-banco  should 
lose  the  old  right  of  receiving  pure  silver,  and  should  only  bo 
entitled  to  half  a  thaler  for  each  marc-banco,  that  being  the 
value  of  the  silver  represented  by  the  latter.  Now  the 
French  Treasury  had  bought,  as  we  have  seen,  .£21,000,000 
of  hills  in  marcs-banco,  and  conseipiently  possessed  the  right 
of  claiming  silver  for  such  of  them  as  fell  due  before  15th 
February,  1878,  while  all  the  rest  from  that  date  were  paya- 
ble in  thalers.  The  thaler  was  "liberative,"  while  the 
marc-banco  was  not;  but  the  pure  silver  which  the  marc- 
l)anco  represented  could  be  coined  into  five-frane  pieces,  and 
l)e  delivered  to  the  (Jerman  (Government  at  the  rate  of  3 
francs  7")  centimes  per  thaler.  Tlu^  result  was  that,  being 
by  far  the  largest  holder  of  marcs-l)an('o  paper,  the  French 
Treasury  was  able  for  a  time  to  control  the  Hamburg  niiirket, 
and  it  naturally  used  for  its  own  advantage  the  [)ower  which 
this  position  gave  it.  The  ITamlturg  Hank  was  utterly  una- 
ble to  deliver  the  quantity  of  silver  for  which  France  lield 
acceptances  in  marcs-ltanco;  it  was  absolutely  in  the  hands 
of  the  French  Minister  of  Finance;  that  functionary  appears, 
however,  to  have  acted  very  fairly,  — to  have  only  asked  for 
silver  in  moderation,  and  to  have  profitecl  l)y  his  ])ower 
solely  to  ol)tain  conversions  into  thalers  on  good  condi- 
tions. The  result  was,  as  we  have  said,  that  £3,732,000  of 
Ifamburg  silver  came  to  the  Paris  mint,  partly  through  Oov- 
crnment  importations  on  marcs-banco  bills,  partly  through 
{)rivate  speculators,  who  followed  the  example  of  the  Treas- 
ury, and  pressed  the  Ifandiurg  Hank  for  metal. 

Such  are,  in  a  condensecl  form,  the  essential  features  of 
the  history  of  this  extraordinary  operation;  and  now  that  wo 
have  completed  the  account,  we  need  no  longer  delay  the 


-M?=l 


v^yt 


'^•fyi 


348 


ECONOMIC  HISTORY. 


m*i 


expression  of  our  admiration  of  the  consununate  ability  with 
which  it  was  comhu'tod.  Its  success  may  bo  said  to  have 
been,  in  every  point,  complete;  we  cannot  detect  one  sijj^n  of 
a  grave  hitch  or  of  a  serious  error  in  it.  It  does  the  highest 
honor  to  (he  ollicials  of  the  French  Treasury,  nwd  proves  that 
(hey  possess  a  perfect  knowledge  of  exchange  and  bank- 
ing both  in  their  minutest  details  and  in  their  largest 
aj)plications. 

When  we  look  back  ui)on  the  subject  as  a  whole,  three 
great  facts  strike  us  in  it:  the  lirst,  (hat  France  is  vastly 
rich;  the  second,  that  tlie  trade  of  Europe  has  attained  such 
a  magnitude  that  figiu'cs  are  ceasing  to  convey  its  measuie  ; 
the  third,  tluxt  the  aggregate  eonnnercial  action  of  nations  is 
a  lever  wliich  can  lift  any  (inaneial  htad  whatever.  As  we 
see  the  transai^tion  now,  with  these  explanations  of  its  com- 
position before  us,  we  cannot  fail  to  recognize  that  it  has 
been  rather  Eiu'opean  than  purely  French,  All  purses 
helped  to  provide  funds  for  it;  all  trades  supplied  bills  for  it. 
In  every  previous  state  of  the  world's  connncrce  such  an 
operation  would  have  been  impossible;  fifty,  thirty,  twenty 
years  ago,  it  would  have  ruined  France  and  have  disoi'dered 
Europe;  in  our  time  it  has  come  and  gone  without  seriously 
disturbing  any  of  the  economic  condidons  under  which  avc 
live.  France,  out  of  her  own  stores,  has  quietly  transjjorted 
to  lierlin  a  (piantity  of  bullion  larger  than  the  whole  ordi- 
nary stock  of  (h(?  Hank  of  England;  and  yet  she  shows  no 
sign  of  having  lost  a  sovereign.  She  has  paid  in  her  bank- 
notes for  ,£170,000,000  of  transmission  pa])er,  and  yet  the 
(pianiity  of  lu-r  l»ank-notes  in  circulation  is  now  steadily 
diminishing.  Such  realtities  as  these  would  ])C  altogether 
inconceivable  if  we  did  not  see  their  cause  behind  them; 
(hat  cause  is  simple,  natural,  indis])utable;  its  name  is  the 
present  situation  of  the  world's  trade.  The  vastncss  of  that 
trade  explains  the  mystery. 

IJut  yet  with  these  advantages  to  help  it,  the  operation 
had,  in  addition  to  its  enormous  size,  certain  special  dilh- 
culties  to  contend  with.  As  one  example  it  may  be  men- 
tioned  that   among  the  elements    of    perturbation   and  of 


1^; 


i 


THE  FRENCH  INDEMNITY. 


349 


conscfpient  impediments  to  remittance,  the  Frenc^h  Govern- 
ment liiid  to  keep  in  view  the  fact  that,  at  the  very  moment 
wlion  it  needed  all  the  monetary  facilities  it  conld  obtain, 
the  German  Government  was  locking  iij)  gold  in  its  cellars, 
in  order  to  provide  metal  for  the  new  coinage  it  was  [)re- 
paring.  This  was  a  most  unlucky  coincidence;  but  it  ex- 
isted, and  it  had  to  be  met.  The  German  plan  was  to  hold 
back  the  issue  of  the  new  money  until  £30,000,000  of  it 
were  ready  to  be  exchanged  for  the  old  silver  currency;  con- 
secpiently,  no  silver  could  be  expected  to  leave  Gernumy 
until  simie  months  after  the  date  at  which  the  gold  had  been 
brought  in  there;  and  during  the  interval  France  knew  that 
she  must  suffer  from  the  withdrawal  of  so  much  bullion  from 
the  general  market.  But  she  foiuid  assistance  in  an  unex- 
pected way;  silver  did  flow  back  to  her  at  once  from  Ger- 
many, without  waiting  for  the  issue  of  the  new  gold  currency. 
France  paid  Germany  j£l),572,000  in  French  silver;  but  this 
was  of  no  use  to  the  latter;  on  the  contrary,  it  Avas  an  em- 
barrassment to  her,  for  she  was  on  the  point  of  exporting  a 
quantity  of  her  own  silver,  which  would  become  superfluous 
as  soon  as  the  new  gold  got  into  circulation.  So,  for  this 
reason,  a  considerable  portion  of  the  French  five-franc  })icces 
came  back  immediately  to  France,  and  helped  to  reconstitute 
her  store. 

And  all  the  other  difficulties  were,  more  or  less,  like  this 
one.  At  first  sight  they  looked  grave  and  durable,  l)ut  they 
diminished  or  disap|)eared  as  soon  as  they  were  seriously 
attacked;  the  whole  thing  turned  out  to  l)c  an  astcmishing 
example  of  obstacdes  overrated.  The  unsuspected  wealth  of 
France,  assisted  l)y  an  extent  of  general  commercial  dealings 
which  was  more  unsuspected  still,  mnnngod  to  g»^t  the  better 
of  all  the  stumbling-blocks  and  impossibilities  which  seemed 
to  bar  the  road.  France  has  lost  £400,000,000,  one  half  of 
which  she  has  delivered  to  her  enemy,  and  yet  she  is  going 
on  prospering  materially  as  if  nothing  at  all  had  happened. 
But  it  is  now  (piite  clear  that  she  never  could  have  nuinage<l 
all  this  alone;  she  could  have  found  the  money,  but  never 
could  she,  single-handed,  have  carried  it  to  Germany.     It  is 


I.  III? .'  ■« 


If 


p 


3r)0 


ECONOMIC  JH STORY. 


vi: 


fir  I 


i 


I 


i^' 


m^-.. 


!§■ 


I 


; 


there,  far  more  tlmn  in  siilwcriptions  to  her  loans,  that  tlio 
worUl  has  really  helped  her;  she  has  lujught  back  the  stock 
that  foreii^ners  subscribed  lor  her,  but  she  could  not  do  8() 
without  tilt;  bills  they  S(jld  her.  If  she  had  been  left  to  her 
own  resources  for  the  transport  of  the  indeiuuity  to  I>erlin 
she  would  probiil)ly  have  l)een  forced  to  send  two  thirds  of  it 
in  bullion,  and  to  empty  her  i)eople's  pockets  for  the  pur- 
pose; the  vastness  of  the  world's  trade  and  the  unity  of  in- 
terests which  connncrce  has  produced,  permitted  her  to  use 
other  nations'  means  of  action  instead  of  her  own. 

Viewed  in  this  light,  the  payment  of  the  live  milliards 
becomes  an  enormous  piece  of  admirably  well-arran<i(;(l  in- 
ternational banking,  in  which  nearly  all  the  count  inghouses 
of  Northern  Kurope  took  a  share.  That  delinition  of  it  is 
worth  knowing,  and  we  may  be  glad  that  the  inforuudion 
given  in  M.  Say's  report  has  enabled  us  to  arrive  at  it. 


APPLICATION  OF  TIIK  INDEMNITY. 

FitoM  Koi.n's  "Thk  Condition  of  Nations"  (Trans,  hy  Mrs. 
Bui:wEii),  I'l'.  290-"_'99.i 

When  the  North  Cicrman  Confederacy  was  formed,  not- 
withstanding the  transfer  of  the  proceeds  of  the  customs  and 
of  other  indirect  imposts  to  the  Coiifeileracv,  and  in  s|;iie  of 
considcnilile  contril)Utions  by  the  difTcrent  States,  the  reve- 
nues did  not  sullice  to  cover  the  expenditure,  especially  that 
of  the  establishment  of  a  larger  sea  force.  A  deficit  was  the 
result,  and  loans  had  to  be  raised. 

In  the  yoar   1><08   tlic  debt  of  tlin  Confeder.iey 

nmonnted  to il.T  10,000 

bi  isc.iito 1,:M-J,:J:58 

And  ill  1870  it  rose  to l,7.3.'j,74:l 

\\h\U;  ill  1S71  it  was I,!t88,882 

The  war  made  the  contraction  of  a  further  debt  unavoida- 
ble, both  for  the  States  of  the  North  (Jerman  Ccmfederacy 

1  London:  George  Bill  &  Co.,  1880. 


THE  FIIENCII  INDEMNITY.  861 

n3  well  as  for  thnso  of  South  Oormnny.  Tlio  sum  immedi- 
ately expemled  on  the  war  must  have  amounted  to  about 
X")!, 000, 000.  The  result  of  the  war  led  to  a  eomplete  revo- 
lution in  the  condition  of  finance.  We  extract  the  following 
data  from  the  memorandum  which  was  laid  before  the  Diet 
Ity  the  Imperial  Chancellor  on  February  18,  1H74,  with 
rcirard  to  the  a|)plieation  of  the  French  war  contribution:  — 
The  HrcciptH  amounted  to  — 

1.  War  contribution  by  France £200,000,000 

2.  Interest  upon  this  till  the  payment  of  the 

debt lL>,0IT,G78 

Total £'-'12,017,078 

3.  Added  to  tiiis,  contribution  of  the  City  of 

Paris 8,025,879 

4.  Customs  levied  in  France  and  local  contri- 

butions, less  cost  of  collection,  so  far  as 
these  sums  were  not  employed  for  siiecial 
military  purposes,  about 2,600,133 

Total  receipts £222,082, T'O 

Of  this  sum  £12,(>9!\000  must  be  deducted  for  the  acqui- 
sition of  railways  ))elon;jjin,u;  to  a  private  company  in  Alsace- 
Lorraine,  the  remainder  being,  therefore,  .£209,082, GDI. 

ExpeniVitiiren. 

1st.  Expenses  for  which  hxed  sums  were  granted  by  Im- 
perial di'crees,  namely:  — 

For  the  Imperial  Invalid  Fund £2S,0.-n,000 

For  the  completion  of  German  fortresses  .     .     .       10,S(»(),()00 

For  fortresses  in  Alsace-Lorriiine G,0:57,G12 

For  raih'oads  in  the  Iin|ierial  Dominions,  par- 
ticularly the  W'ilhelin-Luxeniliourp  lino     .     .  8,210,883 

For  Imjierial  war  treasures,  to  bo  kept  in  the 
Julius  tower  of  the  fortress  of  Spaiulau     .     .         6,000,000 

Compensation  for  tlie  deerease  in  the  revenue 
causeil  by  alterations  in  the  management  of 
tiio  customs  and  taxes 2,008,907 

Imperial  Treasury  fund,  for  the  administration 
of  tlie  marine,  and  for  unredeemable  advances 
for  the  management  of  the  I n4)erial  army  .     .         1,503,000 


h  *m 


m 


w 


■  t  •  I 


sf  ■:■ 


Wty^^ 


852  ECONOMIC  HISTORY. 

For  p^rnttiilics  to  guiionilH  fur  diHtinguished  sor- 
vicHS 600,000 

For  aid  to  (Icrmans  banished  from  France    .  300,000 

For  rxerciso  ground  for  the  Artillery-trial  Com- 

MiisHJon 200,250 

Ex|K.'n(iiture  for  jronoral  pur|ioses  defrayed  by 
the  Imperial  Truaitury  iu  1U70  and  IH71,  and 
the  additional  outlay  for  troops  garrisoned  in 
Alsace-Lorraine  till  Iho  end  of  1872      .     .     .         1,240,600 


Fjnatly,  c£6,19r),181  jjrriintcd  ity  nii  Imperial  decree  of  July 
8,  1878;  for  iimrine,  i: 4, -200,7 83;  iMiililinjrs  for  the  Diet, 
jC1,2<)0,000.  Sii|»|tlcin(Milal  cxpcnHcs  of  war,  inclii<liii<r 
various  other  jrraiits,   inakiuf^  total  of  X72,ll(»,704. 

To  this  must  he  adtlccl  those  outlays  the  aiuount  of  which 
dej)eiuls  on  the  sum  reipiired  for  the  attainment  of  the  ohjcct 
in  view.     They  may  bo  estimated  as  follows:  — 

1.  Compensation   for  damages  by  war  and  for 

war £5,0'r),000 

2.  Compensation  to  German  ship-owners  .     .     .  810,000 

3.  For  war  medals 45,000 

4.  Invalid  ponsions  in  consequence  of  the  war  of 

1870,  1871,  and  1S72 1,513,466 

5.  Additi(mal  for  payment  of  invalid  pensions, 

payable  out  of  the  Imperial  Invalid  Fund 
during  the  time  that  that  fund  was  not  per- 
fectly established 897,000 

6.  War  expenses  connected  with  the  French  War 

costs  indemnification,  which,  according  to 
Art.  5  of  the  decree  of  .July  8,  1872,  are  to 
be  treated  as  common  charges,  viz. :  — 

(n)    For  arming  and  disarming  of  fortresses  .       1,477,078 

(h)     For  siege  material 1,400,223 

((•)     For  marine  administration 1,402,876 

((/)    For  temporary  arrangements  for  coast  de- 
fence, etc 148,121 

(e)     For  laying  down  and  repairing  railroads, 

etc  ,  necessary  for  prosecuting  the  war  718,797 
(/)   For  the  establishment  and  working  of 
telegraplis  outside  the  limit  of  the  tele- 
graph system 30,418 


THE  FRENCH  INDEMNITY. 


853 


(ij)  For  temporary  civil  administration  in 
France,  especially  for  niiiiiagcmeiit  of 
railways  in  AUacu-Lorruiiio,  till  the 
end  of  lb71 


£50;),057 


Further  for  nervices  wliicli  from  July,  1, 
1871,  were  in  connection  with  the  war, 
viz.:  — 

(A)    Management  of  the  post 

(/)     Managument  of  telcirraplis 

(A)  Increased  expenditure  in  tlio  manage- 
ment of  the  army,  over  and  above  that 
in  time  of  peace,  consequent  ujion  the 
occupation  of  French  territory    .     .     . 

(/)  Further  estimates  for  general  expenses 
to  bo  defrayed  by  the  Imperial  Treas- 
ury, about      


83,7.-10 
««,500 


3,150,000 


37,500 


The  total  aiijoiint  of  oxixMiditiirc  fiiiiil  to  ho  dcdiictcMl  from 
the  rcvonnc  ainoiints  thorcfon!  to  il'.M),  liio, ')44,  l(>avintf  a 
remaiiuior  of  jG11'.*,Oo7,11>7  to  Ito  dividftl.  It  is,  liowcvcr, 
dt'sirahlc  to  retain  a  moderates  roHcrvc;  for  |>(»8sii)l(*  dcfificn- 
cic'S  in  tht;  t'stiniatfil  irccipts,  in  oxpcotation  of  greater 
requirements  in  the  e.\|ieiiditure. 

The  Sinn  to  l)e  divided  may,  therefore,  l»o  estlmatecl  in 
romid  numlMM-s  at  £118,000,000.  Tlu-ee  fourths  of  this 
were,  in  accordance  with  Artichi  0  of  the  statute  of  the  Hth 
of  July,  187:5,  set  apart  f<u'  military  |mr|Mises,  in  the  propor- 
tion specified  in  the  ahove  Article  G,  and  one  fourth  to  lie 
divided  aceordini^  to  a  fixed  standard  of  1871.  The  sum  for 
division  is  shared  as  follows:  — 

1.  Bavaria £13,.380,001 

2.  Wiirtemborg 4,27.'), l:JO 

3.  North  German  Confederation 79,r)17,lo7 

4.  Haden 5,(>1!(.!»77 

5.  Hesse l,|(K»,()r)l 

„       ,                      ,  \       !)17,H50 

For  the  payment  of  expenses i  ,  j.  ,,g,j  r.^\ 

About  £22,. 500, 000  of  the  entire  war  contriluiticm  were, 
in  obedience  to  Imperial  decrees,  applied  to  civil  objects, 

28 


jfli 

1 

:'  i 

f '    . 

':i 

. 

il 

■ 

''$\ 

K  .  ■'! 


■   f 


rn- 


i-. 


m '  1 

hhI 

'" 

B 

354  ECONOMIC  HISTORY. 

the  rest  for  purpo"^  os  of  war.  The  sums  which  fell  to  the 
separate  States  in  the  division  were  also  mostly  expended 
in  defraying  the  costs  of  war,  and  the  repayment  of  loans  for 
war. 

According  to  the  statute  of  2d  of  July,  1873,  £10,027,021 
of  the  sum  to  be  divided  were  set  apart  for  restoring  the 
army  to  a  war-footing  and  increasing  its  general  cflicicncy. 

We  find  f"onx  a  report  of  the  Commission  on  the  State  debt, 
under  date  April,  1874,  that  the  Imperial  Invalid  Fund  pos- 
sessed paper  of  nominal  value  — 

Iiithalers £23,081,742 

In  South  German  guldens 933,187 

In  Dutch  guldens 213,""  < 

In  English  pounds  sterling 918,760 

In  dollars 3,55(3,800 

And  in  banks 393 

The  fortress  building  fund  possessed  at  the  same  time  a 
nominal  value  of  X5, 229, 795  in  effects,  and  a  capital  of 
£2,789,913  in  the  Prussian  bank.  .  .  . 


THE  LIQUIDATIONS  OF  1873-WQ. 


855 


XIV. 


THE  LIQUIDATIONS  OF  1873-76. 

FuoM  Giffkn's  Essays  i.n  Finance,'  vv.  107-131. 

"IT  7IIAT  are  the  characteristic  marks  of  the  jrioat  dcpres- 
'^  '  sion  of  trade  clurinj^  t)ie  last  three  or  four  years  V  It 
is  now  ascertained  that  such,  depressions  are  periodical.  They 
recur  at  toleraldy  regular  intervals,  folhjwing  in  the  wake  of 
equally  regular  periods  of  great  prosperity  in  trade,  when 
everybody  makes  profits  or  seems  to  make  them.  The  alter- 
nation has  no  doubt  its  roots  in  human  nature,  which  lends 
itself  to  an  ebb  and  How,  an  action  and  reaction  in  alTairs. 
The  depressions,  like  the  periods  of  prosperity  coming  before 
them,  have  also  many  features  in  common.  Just  as  the  pros- 
perity is  shown  by  the  prevalence  of  good  credit,  an  active 
money  market,  and  a  high  range  of  prices  for  Ijuth  securities 
and  commodities,  so  the  depression  is  marked  by  a  low  range 
of  prices,  heavy  failures,  bad  credit,  and  con3e(iuently  a  slug- 
gish money  market.  IJut  each  has  likewise  its  own  sjK'cial 
features  and  incidents.  The  crisis  in  which  it  begins,  or 
which  it  j)roduce3,  indicates  some  special  development  ni 
trade  at  the  time,  or  some  special  disease  in  it,  —  the  favorite 
business  of  a  country  changing  from  time  to  time,  and  a  ccm- 
stant  tendency  existing  to  go  to  an  extrem(>  with  the  momen- 
tary fashion.  We  propose,  then,  to  inipiiie  what  are  tbeso 
special  features  in  the  n^cont  depression,  —  tiiis  })roc(!eding 
beiiig  likoiy,  it  is  obvious,  to  be  more  instructive  than  a  mere 
examination  and  record  of  those  features  which  most  depres- 
sions have  in  common.  There  is  an  additional  reason  for 
this  course.  An  impression  prevails  tliat  the  pnsent  stagna- 
tion of  trade  is  unprecedented  in  intensity  and  duration,  and 

'  London :  George  Bell  and  Sons,  1880. 


«H 


■1 


356 


ECONOMIC  HISTORY. 


:!' 


tliat  it  is  likely  to  be  pcnn.ancnt.  A  similar  impression  has 
ol'ten  been  found  to  prevail  at  such  times,  and  it  will  be  inter- 
esting to  inquire  whetiier  it  is  now,  for  once,  well  founded,  or 
whether  in  reality  the  depression  is  not  much  less  than  those 
to  which  trade  lias  often  been  subject,  and  is  not  as  likely  as 
any  otlier  to  terminate  in  a  new  period  of  pros])erity. 

I. 

Endeavoring  to  answer  the  (picstion  we  have  put,  what  wo 
are  first  struck  with,  in  a  general  survey  of  the  last  three  or 
four  years,  is  the  universality  of  the  depression.  Almost 
every  ei\  ili/ed  country  has  l)een  afVected.  The  begiuning  was 
in  187;5,  with  the  great  Vienna  panic  and  crasii  in  May  of 
that  year,  —  a  crash  which  was  accompanied  by  immense 
agitation  throughout  (leiinauy  and  in  Kngland,  and  the  itcciu*- 
rence  of  incidents  on  almost  every  European  Dourse.  which 
only  stopped  short  of  panic.  IVext  came  a  great  panit;  and 
crash  in  the  autunm  of  187;>  in  the  Tnited  States,  perhaps  the 
greatest  event  of  the  kind  to  which  that  cnuntry,  tliough  it 
has  had  nuuiy  great  panics,  has  ever  been  sultject.  This  was 
accompanied  by  a  renewal  t)f  agitation  in  Kuglan<l,  as  well  as 
genoriilly  on  the  (^)nt;nen  .  ^^  the  rates  of  discount  in  Novem- 
ber, 1S7:>.  signi(ie:iiitl\  jirove.  At  that  date  the  minimum  liank 
rate  of  discount  was  in  London  no  less  than  nine  per  cent,  the 
maximum  being  two  and  three  per  cent  higher;  the  min'nium 
in  I'aris  and  Hrussels  was  seven  per  cent ;  in  Herlin  and  Frank- 
fort, live  per  cent;  Vienna,  live  per  cent:  and  Amsterdam, 
six  and  a  bidf  per  cent.  Thf>  following  year  was  comparatively 
quiet,  i)ut  it  was  marked  by  great  monetary  disturbances  in 
South  America,  and  by  a  great  fall  in  prices  both  at  home,  m 
the  Continent,  and  in  the  rnifed  States.  In  IHl!)  came  re- 
newed disturliances  in  South  America,  a  renewal  of  agit.ition 
in  the  rnitnl  States  and  rJeimany  ;  and  then  the  !m  Thurn. 
Aberdare,  Collie,  Sanderson,  ami  otiier  I'aiiures,  eonstiliiting 
the  commercial  crisis  of  that  year  in  Mngland.  This  was  in 
turn  succeeded  by  a  great  collapse  in  foreign  loans,  which  had 
been  heralded  and  partly  rehearsed  in  1873,  on  the  occasion 


THE  LIQUIDATIONS  OF  1873-1876. 


867 


of  tho  bankruptcy  of  Spain,  and  of  which  the  conspicuous 
incident  now  was  tlic  non-payment  of  tlic  Turkish  debt  inter- 
est. To  all  these  events  succeeded  renewed  depression  and 
stairnation  in  trade  at  home,  as  well  as  on  tho  Continent,  tho 
crisis  in  Russia  in  1871)  being  very  marked,  and  the  wholo 
'intinuing  till  it  seemed  to  have  a  fresh  cause  in  the  appre- 
hension and  actual  outl)reak  of  the  present  war.  Tlius  tho 
depression  has  been  widespread  and  general,  —  Italy,  Spain, 
and  France  perhaps  escaping  with  little  hurt,  but  Austria, 
Germany,  Russia,  the  United  States,  and  the  South  Ameriean 
countries  having  all  l»(>en  in  deep  distress. 

This  iniiversality,  on  a  comparison  with  former  periods  of 
crisis,  may  be  in  fact  apparent  only,  arising  from  the  greatly 
increased  facilities  of  observation  at  tho  present  day.  There 
never  was  a  time,  probably,  since  commerce  was  suHiciently 
advanced  in  niore  countries  than  one  to  admit  of  crises,  in 
\\i>ich  the  cdmmercial  misfortunes  of  one  country  did  not  re- 
act on  countries  with  which  it  did  business.  At  such  periods 
PS  182.3,  1837-39, 1857-58,  18t)l-()2,  and  18(;i)-08,  it  is  un- 
d"!  btedly  the  case  that  the  crisis  in  England  has  l)een  aecom- 
(..vnied  by  more  or  less  severe  crises  elsewhere,  —  France, 
America,  Fngland,  Holland,  and  the  flerman  towns  on  the 
KUte,  having  sjiared  eaeli  other's  misfortunes  more  or  less 
during  (lie  whole  period.  Now  the  crisis  is  f(!lt  to  be  moro 
exter  lid,  because  we  are  immediately  informed  of  the  events 
in  most  distant  places,  liecause  we  see  at  once  the  association 
of  failures  at  centres  remote  from  each  other,  and  because  wo 
also  see  lit  onct>  the  eileet  in  one  plai-e  of  tlu'  c:\]\  upon  it  to 
render  assistance  at  another  distiirlied  ceiitie  of  business.  But 
it  is  also  true  that  connnercial  relations  are  themselves  far 
more  extendeil  than  was  tiie  case  before  I'aiiwnys  and  tele- 
graphs; that  there  are  wide  reii'ions  —  in  tb<'  I'nited  States, 
for  instance  —  wliicli  could  not  have  been  the  suiiject  of  crisis 
twenty  or  thirty  years  ago.  liccause  they  were  iini)eopled  ;  that 
such  countries  as  Austria  and  Russia  have  lately  shared  moro 
largely  than  before  in  iiulustrial  development  :  and  that  (!er- 
many  has  also  advanced  farther  in  tin.  path  which  mnkes  it 
possible  for  it  to  be  the  sul)jeet  of  a  commercial  crisis.     There 


I  > 


,i& 


m 


I 


f 


w 


358 


ECONOMIC  HISTORY. 


m 


h  ■.:?; 


1.1  ■ « ' 


is  consequently  a  rcol  reason  for  the  greater  extension  of  the 
commercial  depression  of  the  last  three  years  as  compared 
with  anything  before  witnessed,  while  it  is  eiiually  true  that 
steam  and  telegraphs,  Ity  facilitating  communication,  have 
destroyed  the  niitural  barriers  bcUvcen  the  dillerent  coun- 
tries of  the  commercial  world.  The  Londor  money  market 
appears  to  be  the  great  e<|ualizer  of  miukets,  because  it  re- 
ceives the  shock  of  every  important  business  event  through- 
out the  world,  and  transmits  the  shock  cf  what  it  feels  to 
every  other  centre.  Rut  whatever  the  nature  of  tbe  connec- 
tion, it  is  certain  tlwit  there  is  a  connection  between  com- 
mercial crises  in  difl'erent  parts  of  the  world,  and  tiiat  the 
wider  range  of  business  increases  the  possible  area  of  dis- 
aster when  once  disaster  has  set  in. 

II. 

The  next  important  characteristic  of  the  depression,  and 
perhaps  the  most  important  characteristic  of  all,  apjtears  to 
be  that  the  conspicuous  industry  which  has  failed  is  that  of 
the  "  exploitation  "  of  new  count',  ies  with  littl';  surplus  capital, 
and  whose  business  is  mainly  that  of  producing  raw  materials 
and  food  for  export,  by  old  countries  which  have  large  surjilus 
capital,  and  arc  largely  engaged  in  manufacturing;  in  other 
words,  the  investment  in  new  countries  by  the  capitalists  of 
old  countries.  Much  l)ad  Iiusiiu'ss  is  brought  to  light  in  eve:y 
depression;  but  it  is  the  peculiarity  of  the  comiricreial  cycle, 
as  we  have  noticed,  that  there  is  a  change  fn»m  time  to  time 
in  the  favorite  business,  so  that  every  period  has  its  special 
trade  development,  and  special  tr;.(l(^  disease.  The  favorite 
liMsiiK'ss  for  many  years  b(>fore  \^~'-\  had  become  that  of 
foreign  investnu-nt,  and  now  the  depression  (tceurs  where 
there  was  the  greatest  expansion.  [)ircct  cvideiuH!  in  such 
matters  is  dillicult  :  it  would  hardly  lie  possible  to  measure 
precisely  t1;e  extent  of  tiie  various  descriptions  of  disaster 
which  combine  to  make  a  crisis;  liut  there  ai-e  many  facts  and 
circinnstances  wliich  can  leave  little  (h)ui)t  in  llie  mind  that 
the  direct  evidence,  if  it  could  be  obtained,  would  wholly  con- 
firm the  conclusion  stated. 


iV.! 


77//;  iJQriDATroys  of  m.i-isrc. 


860 


Tho  onlor  of  events  in  tlic  crisis  affords  of  ilsclf  a  very 
striking  confirmation  of  the  assiunptioii.  TIh;  tlilliciiltics  com- 
menced in  tlic  countries  more  or  less  farmed  by  the  caitital 
of  Eiiijhind  and  other  old  countries  ;  whose  inthistrics  are 
nourished  hv  pulilie  l(»ans  from  Kmrhmd,  and  bv  the  invest- 
ment  of  private  Kntrlish  capitalists  within  tlieir  territories, 
principally  in  the  form  of  Kn)^lish  iron  and  manui'aetures. 
The  crisis  in  Austria,  whicli  was  the  lirst  in  the  whok;  series, 
was  a  crisis  in  a  country  answering  tliis  description  to  some 
extent.  To  the  United  States,  where  tlie  next  crash  occurred, 
tlie  description  is  still  more  aitplicable.  The  South  American 
countries,  whose  prolonged  sulTering  was  the  special  feature 
of  1874,  are  almost  a  domain  of  Kngland;  and  Russia,  too, 
is  largely  "  dcvelo|)ed  "  by  English  capital.  Some  of  these 
countries,  especially  Austria  and  Russia,  have  not  l»een  ex- 
clusively dependent  on  Knglish  capital.  They  have  also  l)ene- 
lited  by  the  accumulation  of  capital  in  Holland,  Delgium,  and 
France,  which  had  been  drawn  largely  to  Cermany  before 
1873,  through  the  French  indemnity,  and  hail  overllowcd 
thence  into  Austria  and  Russia;  but  the  imlemnity  payments, 
though  they  helpeil  to  precipitati;  mid  agLn-avate  the  crisis  in 
Aust'iii,  did  not  alter  the  power  of  the  crisis  to  renct  on  Kng- 
land.  No  doubt,  in  1873,  as  already  noticed,  the  eolhipse  of 
the  fon  igu  loan  financing  liad  l)een  foreshadowed  ;  iiut  the 
anticipatory  events  of  that  year  were  in  themselves  compara- 
tively unimportant,  so  that  down  to  187")  what  (diiefly  hap- 
pened was  a  succession  of  monetary  and  cnuiuierci;il  crises  in 
countries  dependent  on  Kuglaiul,  but  from  which  Kuglaiid  by 
comparison  escaped.  Tn  iS7.*)  these  crises  were  suceeeded  by 
a  crisis  in  Fuiilund  itself  of  very  -ji-eat  intensity,  naturidly 
leading  to  a  renewal  of  crisis  and  distress  elsewhei'e,  though 
not  of  actual  puiie.  and  the  whole  eidmiiiatinL'  in  the  linan- 
cial  disorders  of  the  foreign  lo:iii  eollapses.  whieh  will  'iroli- 
i'.bly  form,  in  after  years,  tfie  m^st  eonspieuous  feature  of  the 
whole  series  of  liimidatit»n.i.  Tli'  le  appears  to  have  been  a 
natural  order,  theret'ore,  in  tlic  suiffssive  crises  to  whieh  the 
countries  dependent  on  Kuirland  have  been  sulijectcd.  le.Jiuj^ 
to  a  <'risis  in.  Kiiirhind  itself,  und  ilnally  tu  a  linanciul  as  well 
as  a  commercial  coUapsa. 


m 


860 


ECONOMIC  HISTORY. 


m 


m 


Wo  have  next  to  adduce  in  evidence  the  fact  of  the  great 
expansion  of  the  buHJness  of  invoatnicnt  in  foreign  countries 
previous  to  tlie  di'iiression.  The  great  multiplication  of  for- 
eign loans  in  the  period  is  now  familiar.  Not  to  sprak  o<" 
Turkish  and  other  loans,  which  were  so  largely  mere  borrow 
ings  to  pay  interest,  there  was  a  loan  of  £ll:i,(lOO,000  for  Egypt, 
after  there  had  been  large  loans  in  18(18  and  1870;  Chili 
in  the  same  time  (18()7-73)  borrowed  iio.-JoO.OOO  ;  Peru, 
£24,000,000:  Brazil,  X  10,000,000;  Russia,  i:77.0(i(),()()0  ;  and 
Hungary,  j£22,000,000,  —  exclusive  of  minor  borrowings  by 
guaranteed  companies  and  otherwise.  These  were  the  nominal 
amounts  of  the  loans,  and  the  real  money  or  money's  worth 
ever  transmitted  to  those  coimtrics  in  respect  of  tlicin  must 
have  been  much  less;  but,  making  all  deduetions,  flicy  indi- 
cate an  innuensc  direet  credit  opened  \\\\  in  this  country  in 
favor  of  the  States  named.  The  minor  Itorrowiuirs  we  have 
referred  to  were  eipially  important,  if  not  more  important, 
and,  espeeially  in  the  cnsc  of  tlu'  United  States,  tlie  agsjregate 
of  sujiill  loans  lor  railways  and  ofht'r  purposes  was  inuncnse. 
All  this  direet  l»orrowing  likewise  implif(l  a  great  invest uient 
of  capital  privately  in  foreign  countries.  Merchants  and 
traders  were  induced  to  set  up  establishments  abroad  to  facili- 
tate the  business  which  the  loans  Itronght  into  existence,  and 
aecommod;ite  \\w  wants  of  emigrants  t(j  the  new  lirlds  of  in- 
dustry. Tbe  result  was  a  luxuriant  industiial  gi'owth  in  tlie 
new  countries  by  means  of  this  vast  direct  ami  indirect  credit 
which  old  countries  were  giving.  Thus  in  the  United  States, 
immediately  before  1873,  the  length  of  the  whole  railway 
system  had  been  doulded  in  seven  years;  in  Russia  almost  the 
entire  systiMU  nl'  12,'>(I0  miles  has  been  created  since  18*1S;  in 
Austria  there  liad  been  an  increase  from  "2,200  miles  in  1865, 
to  over  (!.0(M»  miles  in  187:3:  and  in  South  America,  Brazil, 
the  River  Tlate  republics.  Chili,  and  Rem,  had  all  been  en- 
dowed witli  railways  in  a  very  f<>w  years,  —  the  loans  for 
these  countries  above  enumerated,  and  especially  the  above 
h>an  of  £21.000,000  for  I'eru,  being  avowedly  all  for  railways. 
And  never  was  there  a  more  rapid  development  of  the  foreiizn 
trade  of  the  United  Kingdom.     The  total  import  and  cxjwrt 


rilE  LIQUIDATIONS  OF  1873-187G. 


301 


trade,  which  was  jC')00,98n,000  in  1807,  had  riacii  in  1873,  or 
in  six  years  only,  to  £08:^,292,000,  or  thirty-six  per  cent ;  and 
the  trade  per  head  from  XIO  1«.  '^<l.  to  .t21  4«.  ihi.,  or  thirty- 
two  per  cent.  Tiic  exports  of  British  prodiieo  alone,  to  take 
the  two  cxtr(>mc  years,  liad  risen  from  .1)170,078,000  in  IcSOS 
to  .£2')0,2')7,000  in  1H72,  or  forty-two  per  cent  in  four  years, 
the  inereasc  ]>cr  head  Iieint?  in  the  same  period  from  X")  17». 
4'/.  to  .CS  Ix.,  or  thirty-seven  per  eeut.  All  this  had  followed 
a  ra]tid  rise  in  previous  years;  for  the  panic  of  1800  was 
chiefly  the  collapse  of  a  liome  company  mania,  and  had  not 
l)ri)ii<rlit  with  it  discredit  of  forei<?n  loans,  or  a  eolla|tse  of  the 


i)usii 


>f  lendin''  to  foreiirn 


)un 


tries.     And  in  one  or  t 


wo 


ismcss  oi  lendin;.^  to  loreiirn  coi 
trades  the  increase  of  business  was  even  frreater  than  the 
general  inereasc.  Thus  the  (juantity  of  our  iron  and  stetd  ex- 
ports rose  from  2,042,000  tons  in  1S(;8  to  3,383,000  tons  in 
1872,  or  sixty-six  per  cent  in  four  years,  while  there  was  sim- 
ultaneously a  rise  of  price  whiidi  made  the  increase  in  values 
imujense,  not  only  in  these,  hut  in  other  articles  wiiere  there 
was  no  such  increase  of  t|uantity.  It  is  sonietinies  said  that 
the  hurst  of  trade  which  euliuinate(l  in  1S72-73,  was  larjrely 
due  to  the  extra  demand  for  our  manufactures  created  l)y 
the  Franco-derman  War.  This  war  cheiked  manufacturimr 
on  the  Continent  for  nearly  a  twelvemonth,  besides  eausiiiL^ 
a  war  demand  for  certain  of  our  manul  ictures.  Hut  the 
comparison  we  have  made  is  of  a  year  when  the  war  was  loni? 
over,  with  a  year  quite  before  the  war,  while  the  most  con- 
spicuous instance  of  increase  in  our  exports  was  in  iron  and 
steel,  whieli  was  clearly  in  connection  with  increased  railway 
construction  al)road.  The  expansion  of  our  foreiirn  trade  was 
thus  manifestly  in  connection  with  the  general  expansion  of 
our  foreign  investment  business,  and  not  the  result  of  the 
accidental  or  tempoiary  caii><es  which  lia'c  bee  i\  assigned. 

That  there  has  been  a  ni  tst  disprcportionatc  stoppage  of 
the  foreign  investment  business,  which  would  go  far  to  ac- 
count for  the  present  depression,  is  also  very  ol)vious.  I  do 
not  refer  so  much  to  the  notorious  stoppage  of  .he  issues  of 
foreign  loans,  small  and  great;  after  every  great  e|•I^is  new 
issues  of  almost  every  kind  come  to  a  standstill,  as  freipieut 


H 


m 


«    :  If 


*■ 

-  4-r  ■ 

'i 

_     {■ 

§- 

m 

I; 

■m 


3G2 


ECONOMIC  HISTORY. 


%v 


'Y-i 


,1 


experience  has  shown.  It  was  so  after  1800,  and  had  been  so 
after  siiuihir  years  of  crisis,  although  I  doubt  if  foreign  issues, 
as  distinguislied  from  home  cnterpi-ises,  have  ever  been  so  com- 
pletely 8toj)ped  as  they  are  now.  Quite  apart  from  this,  wc 
have  tuimistakable  evidence  of  the  decline  in  foreign  invest- 
ment business  in  the  (iuancial  and  industrial  endiarrassmcnts 
in  new  coiudries,  of  which,  as  I  write,  the  great  railway  strikes 
in  the  United  States  furnish  a  now  illustration.  There  has  also 
been  a  diminution  of  singular  magnitude  in  our  export  trade. 
That  traile  has  freciuently  fallen  oil'  in  times  of  general  de- 
pression, but  never  to  such  an  extent  as  has  lately  been  wit- 
nessed. The  diminution  altogether  in  the  exports  of  home 
produce  and  manufactures  hrs  l)een  from  ^Ji")(),2r)7,000  in 
1872  to  £200,030,000  in  1870,  the  change  being  partly  due, 
as  usual,  and  perhaps  rather  more  than  usual,  to  a  fall  in 
price,  but  only  partially  to  that  cause.  There  has  not  since 
the  free  trade  period  been  such  a  dicliue  in  (jur  fdrcign  trade, 
just  as  there  had  been  no  previous  example  of  so  great  an 
expansion.  The  decline  has  also  been  mainly  in  the  exports 
to  such  countries  as  the  United  States,  which  had  l)een  our 
great  borrowers,  —  the  falling  off  to  the  United  States  abme 
being  from  i:40,7:57,O00  in  1872  to  X10,8:U,000  in  1870,  this 
latter  ligurc  being  the  lowest  since  1804.  It  has  also  been 
mainly  in  such  articles  as  iron  and  steel ;  the  exports  of  which 
diminished  from  3,38.3,000  tons  and  jC3r),090,000  in  value  in 
1872,  to  2,224,000  tons  and  £20,737.000  in  value  in  1870; 
while  the  exports  to  the  United  Slates  alone  fell  from  07o,000 
tons  in  1872  to  only  100,000  ttms  in  lS7(i.  The  recent  dimi- 
nution in  our  export  trade  is  therefore  not  oidy  unusual,  but 
it  is  a  diminution  of  the  exports  to  new  count ries,  and  a 
diminution  of  those  articles  which  we  send  abroad  for  the 
purpose  of  new  works  in  such  countries.  So  great  a  change 
in  one  great  branch  of  our  business  would  go  far  to  account 
for  the  general  depression  now  prevailing,  which  is  thus  once 
more  traced  to  the  failure  of  our  foreign  investments. 

The  embarrassments  in  the  new  eoinitries  were  also  con- 
nected with  tiie  excessive  development  of  their  capabilities 
which  had  been  attempted.     A  very  consideral)le  amount  of 


li!'  i'. 


rilE   LIQUIDATIONS   OF  1873-1S7C,. 


n03 


the  railway  and  other  speculation  during  the  last  few  years 
has  been  pruved  to  have  been  wholly  in  anticipation  of  the 
wants  of  the  world,  the  evidence  of  this  bcinjif  an  overpro- 
duction of  raw  materials  and  food,  the  characteristic  pro- 
ducts of  the  new  countries.  Of  this  over-production  the  most 
sijfuilicant  Hi^■n  was  the  low  price  of  wheat  in  1875,  notwith- 
staudinj?  the  l)ad  harvest  of  that  year  in  several  countries. 
There  had  previously  been  complaint  of  low  prices  in  the 
United  States,  —  in  1873,  for  instance,  —  and  of  inability 
to  "  k(  -p  back"  crops.  Similar  complaints  had  also  been 
received  from  Russia  in  1874.  Even  in  187G  the  price  of 
wheat  was  slow  in  rising  in  the  autumn,  notwithstanding  a 
goiKM-ally  bad  harvest,  and  the  extreme  war  rise  the  follow- 
ing spring  was  only  maintained  a  few  days.  In  other  words, 
the  assumption  as  reganN  wheat  that  new  countries  might  be 
settled  indefinitely  has  pi'nnl  to  l)e  erroneous.  The  result  of 
what  appears  to  i)C  excessive  cultivation  is  an  unremuuerative 
price,  which  leaves  merely  agricultural  communities  in  dis- 
tress, and  disturbs  their  whole  system  of  industry.  It  has 
been  the  sumo  with  other  raw  materials,  studi  as  cotton, 
although  perhaps  not  to  the  same  extent.  ]»ut  in  general 
the  business  of  producing  raw  materials  and  food  had  been 
o\erdone,  and  the  crises  in  Austria  and  the  United  States  in 
1873,  f()llowe(l  as  they  have  since  been  by  the  similar  crises 
in  South  AuKM'ica  and  Russia,  were  evidiMice  that  tlu;  power 
to  support  the  linanciug  of  the  previous  two  or  three  years, 
which  was  based  on  the  business  of  investment  in  new  coun- 
tries, had  ceased. 

The  uglier  features  of  the  collapse  of  foreign  loans  also 
furnish  evidence  of  the  characteristic  uiai'k  of  the  crisis  with 
whicli  we  have  been  dealing,  lu  addition  to  the  issue  of  loans, 
which  involved  llie  investment  of  capital  in  a  llxed  form  to  an 
extravagant  extent,  so  that  immediate  loss  and  ruin  could  not 
but  ensue,  there  had  taken  plac(>  in  a  few  years  before  1872 
frecpient  issues  of  loans  in  foreign  countries  so-called,  which 
weic  only  disguises  to  plunder  the  public.  We  refer  to  the 
loans  for  Honduras,  Paraguay,  San  Domingo,  and  Costa  Rica, 
which  were  investigated  by  the  Foreign  Loans  Committee, 


;'  1 


m 


:'i\ 


"4 


.Mi'.  , 


I'l? 


Ji'i 


'H 


;JG4 


fa: GNOMIC  Ills  TOR  V. 


and  lo  a  iiiimorous  class  of  which  tliosc  wore  perha|i.H  the 
iiKi.st  lliij^rant  Hpfi'iiiu'nH.  Thcso  wort'  Hiniply  issues  by  knots 
of  s|>coiilators,  usually  on  the  plea  that  they  weir  for  sonic 
|»ul)lii;  work,  —  to  which  a  small  jtortion  of  (he  money  raist-d 
was  perhaps,  in  fact,  devoted,  —  but  really  with  the  d(.'sij,'n,  as 
carried  out  by  those  concerned,  to  pay  themselves  larj^e  sums 
in  commissions  and  otherwise,  so  lonj;  ns  the  public  eoidd  bo 
y:ot  to  believe  in  such  Ihinjis  by  the  payment  of  interest  out 
of  the  funds  they  had  themselves  advanced.  All  this  was 
very  natural.  The  peculiarity  of  the  time  beinj,'  the  develop- 
ment of  foreifrn  countries  by  loans,  it  was  only  natural  that 
the  illejritimate  linanciuir  of  the  time  should  als(»  consist  of  so- 
calle(l  liiaiis.  As  there  had  iieeii  liojrus  compaiiii's  in  the  days 
of  the  enmpauy  mania,  so  now  there  were  Ixijrus  loiins. 

These  !ire  all  ciremnstances  tendin^r  to  show  how  nmeh  thn 
bad  liusiness  luoiiLdit  to  lifrht  in  the  recent  depression  was 
coinieeted  with  the  business  of  investment  in  new  countries, 
and  its  accessories,  whieh  had  previously  just  received  so 
jrreiit  an  expansion.  As  we  have  already  reuinrked,  there 
was  nnieh  bad  liusiness  besides.  In  the  set  of  failures  con- 
nected with  that  of  Messi's.  Collie,  what  seemed  to  be  shown 
especially  was  a  peeidiar  disiwder  in  the  trade  with  ludiii. — 
the  result,  it   is  prolcdtle,  of  th<'  undue  investment  of  capital 

in  that  trade  at   a  date  as  far  back  as  tht tton  mania  in 

18»»;{  and  lS(i4.  IJut  the  liid  liusiness  of  foreiirn  investment 
and  rmaneinir  has  ceitainly  been  far  the  most  prominent. 


i  1     *' 


A  thii'd  distiu'jruisbinir  mark  of  the  crisis  appears  to  be  the 
siuirular  liiilituess  of  its  elTccts  on  Mnirlish  industry  and 
wau'cs.  As  has  been  hinte<l  already,  sindi  is  not  the  com- 
mon iuipi'essioii  rcLrardinir  it.  On  the  contrary,  the  depies- 
sion  of  tiade  is  spoken  of  in  common  speech  as  somelliiiej!.- 

entirely  uiipn dented  both  in  intensity  and  duration,      lint 

a  careful  examiiiatiou  must  prove  that,  as  far  as  matters 
liave  yet  L'oue,  the  counuon  impression  is  wrontr,  ami  the 
tacts  are  cntirelv  the  other  wav. 


■     hi 


'  V? 


M 


i!l'.:il:'- 


,f;r> 


THE  LlQirfDATinXS  OF  lfi73-lS7C,. 


805 


The  common  impiTHMioii  appcarH  to  lie  due  to  a  miHiiitcr- 
prctation  of  two  iiiiiloiilttcd  facts;  lirrtt,  tlic  fvi<li>iit  ma;;iii- 
tilde  of  tli(>  liiiancial  collapHc  in  forci^Mi  loiiiis,  wliicli  hn8 
Itccu  product i VI)  of  jjrcat  sttcial  diriticss  aiiiuipj'  tlic  cIiissch 
who   have    moHt   aiiiph*   opportunities  of   procliiiiiiiii^   their 


jfricvanccs ; 


ind    next,    the    iiui<;ilitllde   of   tile   decline  of   til 


foreign  trad(^  of  tlie  coiilitrv,  which  is  ideiitilieil  with  a  de- 
clino  in  its  \vli(du  trade.  Hut  it  is  easy  to  see  that  there  is 
a  niisintiM'pretatioi).  The  magnitude  of  the  liiiaiicial  collapse 
is,  of  coiiise,  very  serious.  The  novelty  of  the  deception  uf 
the  pui)lic  liy  iio;j:iis  loans  lias  increased  tiie  evil  as  compared 
with  the  evil  of  u  company  mania,  wiiile  th(;  opportunities  of 
fraud  were  really  mor»!  favoralihi  to  the  conspirators  than  in 
tlie  iiianufa(*tiir«'  of  hiilihle  eiunpanies.  A  State  lniin  sounds 
more  respectaldi^  than  a  company  issue.  (Jn  the  wiiulc,  the 
securities  of  States  for  a  Ioii;j:  periinl  had  also  answered 
hetter  than  the  shares  of  coinpanii-s,  and  althoiiLih  also  in 
former  years  many  State  loans  had  proved  the  source  of  loss 
to    Kii'jrlish     investors,  —  several     South    Americiin    States. 


(iieecc,  >pain,  and  <iiie  or  two  .states  ol  the  AmeiMcaii  I  nion 

havini>;  all  proved  ilefaulters,  —  yet  there  had  I n  no  lliiL''iant 

instances  of  loans  which  were  merely  cloaks  t(»  let  pnnuoters 
and  limineicrs  have  commissions.  The  aufciits  ami  institu- 
tions connected  with  States  also  controlled  larirer  resources 
tiian  ha<i  iiceii  (MtntroUed  liy  tlie  linanciers  of  companies. 
Tlie  inaldlity  of  investors,  therefore,  to  form  a  ^ood  jiidjr- 
nieiit  on  the  investments  sniimitted  to  tlieni,  tiieir  disposition 
to  ndy  on  market  price,  and  otiier  extraneous  or  irrelevant 
cireiiinstanees,  was  never  experimented  on  so  widcdy,  or 
with  more  unfortunate  results.  lieiice  tlie  mairnitude  (»f  the 
Itrid  husiness  an<l  the  ensuimr  collapse.  In  the  loans  tur 
Turkey,  lOirypt,  and  I'erii  alone,  the  depreciation  of  securities 
witiiin  a  year  after  the  'I'uikish  collapse  amounte(i  to  aliout 
Xl.'iO, 000, ()()(),  while  there  is  a  total  destruction  or  suspen- 
sion of  income  from  tainted  securities  exceediie_'  £20. Odd, 000 
a  year.  Ihit  trreat  as  this  e<dla|»se  i.s,  it  iias  proltaldy  afTected 
very  little  the  nocnmiilation  or  real  wealth  of  tie'  country. 
Many  people  feel  themselves  poorer  than  they  were  iteftjre,  hut 


I', 


\    :  i'\ 


:  i  I 

-■If 


!' ;  * 


IMAGE  EVALUATION 
TEST  TARGET  (MT-3) 


v 


// 


^(1 


1.0 


I.I 


1.25 


Klin  o 

12.2 


IIIM 

116 


2.0 


1.4 


1.8 


1.6 


>*- 


Photographic 

Sciences 
Corporation 


s. 


iff 


\ 


N> 


^x-^ 


#*>      "'••. 


6^ 


^V 


,<^ 


<?>'■ 


23  WEST  MAIN  STREET 

WEBSTER,  N.Y.  14580 

(716)  872-4503 


W 


o 


^<p  ^- 


[<»/ 


C/u 


nil 


tf- 


f     H 


^"'5     T  Hi 


366 


ECONOMIC  HISTORY. 


the  community  as  a  whole  is  not  really  poorer  by  the  pricking 
of  all  these  bladders.  A  certain  number  of  people  are  8im{)ly 
prevented  from  continuing  any  longer  the  process  of  living 
on  their  capital,  for  that  is  what  they  were  doing  when  they 
were  spending  the  so-called  interest  paid  them,  which  was 
really  only  a  rctui-u  of  what  they  had  themselves  advanced. 
But  the  whole  of  the  so-called  interest  was  not  so  spent,  a 
great  deal  of  it,  as  is  the  case  with  the  interest  of  every  de- 
scription of  investment,  being  reinvested,  and  in  this  way 
the  collapse  really  changes  nothing,  except  to  let  many  peo- 
ple know  that  theii  accumulations  were  imaginary.  The 
direct  economic  effect  is  consequently  nil,  although  the  so- 
cial effects  and  individual  disasters  are  of  the  most  serious 
kind.  The  depression  of  trade  attending  a  financial  col- 
lapse ought  not,  therefore,  to  be  measured  by  the  seeming 
magnitude  of  the  linancial  collapse  itself,  which  last  may  be 
very  great  without  the  ordinary  industry  of  a  country  being 
seriously  checked. 

As  regards  the  second  fact  which  is  misinterpreted,  — 
namely,  the  decline  of  the  foreign  trade,  — the  conmion  im- 
pression only  requires  to  be  challenged  to  prove  its  unsound- 
ness. We  have  probably  a  larger  pro])ortion  of  foreign  trade 
than  any  other  great  nation.  Our  workmen  and  ca])italists 
have  gradually  come  to  exchange  a  larger  proportion  of  the 
products  of  their  industry  iov  foreign  products  than  any  other 
people.  But  even  yet  we  are  very  far  from  exchanging  more 
than  a  small  part  of  what  we  produce.  Our  whole  agriculture 
is  for  home  consum])tion;  our  coal  and  iron  mining,  our  cot- 
ton and  wool  spinning  and  weaving,  our  manufactures  gener- 
ally are  also  mainly  for  home  consumers.  A  decline  in  our 
foreign  trade,  therefore,  is  only  a  decline  in  a  branch  of  our 
whole  trade,  and  should  by  no  means  be  identified  with  a  gen- 
eral dejjression  in  business.  The  recent  decline  in  the  foreign 
trade,  moreover,  is  almost  entirely  a  decline  in  "optional" 
business.  It  is  a  decline  in  our  exports  of  such  articles  as 
we  have  been  in  the  habit  of  exporting  as  a  means  of  invest- 
ing our  cai)ital  abroad.  When  we  stoj)  such  exports,  certain 
branches  of  home  industry,  which  have  been  fitted  to  this 


THE  LIQUIDATIONS   OF  1873-187G. 


367 


peculiar  trade  suffer ;  but  the  capital  which  would  otherwise 
have  been  sent  abroad,  and  the  means  of  producing  that 
capital,  arc  not  destroyed.  In  the  course  of  time  if  the  taste 
for  foreign  investment  docs  not  revive,  the  cr.pital  and  labor 
employed  in  making  articles  for  export  will  be  turned  to  the 
production  of  articles  for  consumption  and  investment  at 
home.  Instead  of  merely  looking  at  the  foreign  trade,  then, 
we  should  look  at  our  aggregate  trade  in  such  times  of  de- 
pression, and  not  suffer  our  opinions  to  be  distorted  by  one 
or  two  conspicuous  facts. 

Coming  to  the  subject  in  this  way,  wo  do  not  see  how  it 
can  be  doubted  that  the  recent  depression,  although  it  is 
vo"v  protracted,  is  as  yet  singularly  light  in  degree.  Our 
imports  of  the  chief  articles  of  popular  consumption,  to  begin 
with,  have  not  diminished  but  increased.  Indeed,  one  of  the 
favorite  complaints  about  the  depression  of  trade  is  the  old 
cry  of  the  excess  of  imports  over  exports,  which  is  certainly 
greater  than  usual  because  our  investments  in  new  countries 
have  ceased  for  a  time,  but  which  is  the  permanent  charac- 
teristic of  English  trade.  It  is  quite  certain,  however,  that 
no  country  sends  us  any  goods  on  credit ;  it  is  England  which 
always  gives  credit  in  the  trade  of  the  world.  Whatever 
increase  of  imports  there  may  be,  then,  is  a  sign  of  real  abil- 
ity to  pay  for  them,  and  pro  tanto  of  the  undiminished  pros- 
perity of  the  country.  To  the  same  effect  we  have  the  fact 
of  an  increase  of  railway  traffic  year  after  year  during  the 
depression.  The  increase  in  1874  and  1876,  and  again  in 
1877  has  been  small ;  but  in  1875,  the  very  year  of  the  great 
commercial  and  financial  collapse,  it  was  considerable.  Evi- 
dence in  the  same  sense  is  also  supplied  by  the  non-increase 
of  pauperism  all  through  the  depression,  and  by  the  steady 
augmentation  of  the  national  revenue  until  the  present  year, 
and  by  the  increase  of  the  savings-bank  deposits.  The  non- 
increase  of  pauperism  is  no  doubt  partly  due  to  our  improved 
administration,  but  no  improvement  of  administration  could 
have  prevented  such  an  increase  of  j)auper8  and  decline  of 
revenue  as  followed  the  panics  of  1847,  1857,  and  1866,  not 
to  speak  of  the  awful  convulsions  and  distress  which  marked 


"h.'l 


iki 
w 


m 


a 


M»r1 


368 


ECONOMIC  HISTORY. 


r 


i . 
«>■'■' 

?!'^ 


U.'' 


||i 


J 


the  depression  of  trade  in  still  earlier  periods.  To  any  one 
who  has  even  glanced  at  the  economic  history  of  England 
during  the  present  century,  the  common  talk  now  about  the 
"unusual  "  depression  of  our  trade  appears  sim[)ly  ludicrous. 
The  people  who  indulge  in  it  have  simi)ly  never  thought  of 
what  depression  of  trade  is.  There  has  jjrobably  never  been 
a  great  commercial  crisis  in  England  which  caused  so  little 
suffering  to  the  mass  of  the  nation. 

When  we  think  of  the  matter  a  little  it  seems  reasonable 
enough  also  that  the  depression  should  be  a  mild  one. 
Severe  as  the  crisis  has  been,  we  were  lucky  enough  to  es- 
cape an  actual  panic,  with  the  shock  to  credit  and  other 
lamentable  incidents  which  a  panic  invariably  produces.  It 
is  probable  also  that  we  were  really  befriended  by  the  pecu- 
liar events  in  the  money  market  in  connection  with  the 
German  coinage.  The  withdrawals  of  gold  for  Germany 
had  the  effect  of  anticipating  the  stringency  in  the  money 
mariict  which  a  period  of  great  expansion  ends  in.  The  ex- 
pansion was  thus  hindered  from  reaching  the  fxtrcme  it 
would  otherwise  have  reached,  and  the  reaction  is  less 
severe.  Some  good  judges  are  of  opinion  that  we  have  to 
thank  yet  another  cause, — the  high  normal  wages  of  our 
workmen  and  their  independence  of  abundant  harvests  and 
cheap  wheat,  as  compared  with  what  was  formerly  the  case, 
so  that  all  our  staple  industries  are  steadier  than  they  Avere. 
But  I  should  doubt  the  effect  of  this  cause  without  greater 
experience  than  we  have  yet  had.  Workmen  will  suffer,  it 
is  to  be  feared,  in  a  way  in  which  they  have  not  lately  suf- 
fered, if  another  time  of  expansion  such  as  there  was  in  1872 
should  reach  its  full  term  and  industry  be  subjected  to  the 
strain  of  the  inevitable  reaction.  But  without  this  cause,  the 
actual  facts  of  the  absence  of  a  panic  during  all  this  depres- 
sion, and  of  the  successive  stringencies  in  the  money  market 
which  checked  the  exuberant  growth  of  1872  and  1873,  ap- 
pear quite  sufficient  to  account  for  the  comparative  mildness 
of  the  effects  of  the  depression  we  are  witnessing. 


l4N. 


UM 


THE  LIQUIDATIONS  OF  1873-1876. 


369 


IV. 

The  marks  of  the  present  depression  which  we  have  enu- 
merated are  thus  its  universality,  its  origin  in  the  breaking 
down  of  the  bad  business  of  foreign  investment,  and  its 
mildness  in  the  United  Kingdom  as  compared  with  former 
periods  of  depression.  Is  there  anything  in  these  peculiari- 
ties, or  in  any  other  circumstances  of  the  depression,  to  lead 
us  to  anticipate  that  it  will  be  unusually  protracted  or  that  its 
effects  will  be  permanent  ?  Is  the  depression,  in  other  words, 
the  beginning  of  anything  unusual  or  unprecedented  ? 

To  put  the  questions  thus  explicitly  is  perhaps  to  answer 
them.  Although  there  is  much  vague  talk  about  existing 
Repression, —  which  is  really  based  on  an  assumption  that  it 
is  something  unheard  of  and  must  be  lasting,  —  it  is  not  so 
easy  to  assert  explicitly  what  is  so  confidently  assumed.  To 
suppose  the  permanence  of  almost  any  depression  would,  in 
fact,  be  to  suppose  a  change  in  human  nature  itself.  Uni- 
versal dulness  and  poverty  are,  .n  fact,  contradictions  in 
terms,  unless  it  is  supposed  that  all  people  will  voluntarily 
be  idle  when  they  have  the  strongest  motives  to  work. 
Whatever  awkwardness  there  may  be  in  the  distribution  ot 
labor  and  capital  at  certain  times,  the  power  to  produce  and 
the  wish  to  consume  ensure  that  with  the  means  of  production 
unimpaired,  —  and  there  is  no  allegation  that  the  means  of 
production  in  the  present  case  are  impaired,  —  production 
will  go  on  and  increase  with  the  increase  of  population  and 
with  every  species  of  chemical  and  mechanical  improvement. 
It  is  thus  morally  certain  that  if  at  any  time  the  industrial 
machine,  as  a  whole,  is  pax-tially  disused  and  times  are  dull, 
a  period  of  full  employment  and  prosperity  will  return. 

And  short  of  the  depression  being  permanent,  its  effects 
will  not,  we  think,  be  worse  than  usual,  if  indeed  the  worst 
is  not  already  past.  The  disorder  has  been  very  general 
throughout  the  world,  because  industrially  the  world  is  get- 
ting to  be  more  and  more  one  country ;  but  there  is  mani- 
festly nothing  in  the  extent  of  a  depression  to  alter  its 
character  or  the  power  of  the  communities  affected  to  re- 

24 


■  .  (  >5 


•I 


'IV 


i:i:im 


iV'-: 


:i. 


,"  1 1'-. 

m 


;:l 


370 


ECONOMIC  HISTORY. 


cover.  So  far  as  England  ia  concerned,  moreover,  all  that 
has  happened  is  that  a  particular  part  of  our  trade,  —  our 
exports  of  domestic  produce  and  manufactures,  — is  mo- 
mentarily weak,  just  as  in  former  times  the  home  trade 
dependent  on  railway  contractors  or  bubble  companies  was 
weak.  Our  new  investments  in  a  particular  direction  have 
failed,  but  that  is  all.  There  is  clearly  no  reason  in  this  for 
any  prolonged  stoppage  or  diminished  use  of  the  industrial 
machine  for  all  the  miscellaneous  purposes  of  life,  although 
it  will  only  be  by  degrees  that  new  outlets  for  our  surplus 
capital  can  be  found.  All  the  reasons  assigned  to  account 
for  the  lightness  of  the  depression  until  now,  — ^the  absence 
of  panic,  the  fact  that  the  collapse  is  so  much  a  merely  finan- 
cial one,  and  the  circumstance  that  the  expansion  previous 
to  the  depression  was  arrested  in  its  natural  development, — 
are  also  reasons  why  it  should  not  be  more  protracted  than 
usual.  Some  new  mischief  may  of  course  arise,  but  there  is 
nothing  on  the  face  of  the  facts,  according  to  all  former  ex- 
perience, to  lead  us  to  expect  an  aggravation  of  the  present 
evils. 

Nor  do  the  special  causes  sometimes  assigned  for  expect- 
ing an  unusual  degree  and  continuance  of  depression  appear 
to  be  entitled  to  much  weight.  The  British  workman,  it  is 
said,  drives  business  away  by  his  misconduct  and  his  de- 
mands for  excessive  wages.  Foreign  nations  are  increasing 
their  manufactures  of  the  very  articles  of  which  England  till 
lately  had  a  monopoly.  Every  import  of  a  foreign  manu- 
facture into  England,  at  a  time  like  this,  gives  occasion 
for  a  new  exclamation  that  English  industry  is  threatened. 
The  changes  are  constantly  rung  upon  such  facts  as  the  in- 
creased capacity  of  the  United  States  for  the  production  and 
manufacture  of  iron;  the  importation  of  certain  descriptions 
of  American  cotton  manufactures  into  England ;  the  appear- 
ance of  Belgian  and  German  manufactures  in  our  markets  at 
a  cheaper  price  than  the  articles  can  be  made  by  ourselves. 
But  those  who  use  this  language  appear  to  fail  altogether  in 
measuring  the  extent  of  the  mischief  they  point  out.  A 
great  deal  of  the  apparent  competition  of  foreign  manufac- 


THE  LIQUIDATIONS  OF  1873-1876. 


871 


turcs  is  due  to  the  search  for  a  market  which  occurs  in  every 
time  of  depression,  and  which  furnishes  no  sure  indication 
whatever  of  any  real  change  in  the  currents  of  trade.  All 
we  know  for  certain  is  that  on  the  other  side  the  complaints 
abroad  of  the  competition  of  English  manufactures  are  loud- 
est at  such  a  time,  and  that  facts  as  to  foreign  competition, 
similar  to  those  now  alleged,  have  been  brought  forward  in 
every  time  of  depression  for  the  last  half-century,  without 
any  serious  permanent  result  on  English  trade  being  trace- 
able. That  trade,  on  the  contrary,  as,  for  example,  after 
the  year  1809,  when  a  great  noise  was  made  about  similar 
facts,  always  makes  a  more  rapid  advance  than  ever  after  each 
depression.  No  one  can  dispute,  indeed,  that  English  work- 
men arc  often  foolish  for  their  own  interest,  or  that  some 
English  trades  have  diminished,  and  others  may  yet  dimin- 
ish or  may  become  stationary,  while  foreign  trades  of  the 
same  kind  increase.  Still  the  question  here  is  of  the  general 
prosperity,  and  it  is  easy  to  recognize  the  strength  of  the 
influences  which  are  likely,  and,  we  believe,  are  certain  to 
limit  the  evils  feared,  as,  in  fact,  they  always  have  limited 
them.  Our  workmen  do,  in  fact,  succeed  in  getting  higher 
wages,  as  a  rule,  than  foreign  workmen ;  they  do  not  migrate, 
and  pauperism  does  not,  on  an  average  of  years,  increase,  — 
all  signs  that  manufacturing,  as  a  whole,  whatever  may  hap- 
pen to  particular  trades,  increases  in  England.  It  is  because 
there  is  so  much  more  profitable  manufacturing  hero  than 
elsewhere  that  our  workmen  can  enforce  the  higher  wages. 
As  we  certainly  cannot  expect  that  foreign  countries  should 
manufacture  nothing  at  all,  but  must  rather  desire  their 
manufacturing  to  increase,  there  is  really  nothing  in  all  that 
is  said  of  foreign  competition  to  concern  us  in  an  inquiry  as 
to  the  permanence  of  the  present  depression. 

The  fallacy  in  the  use  of  these  alleged  facts  as  to  foreign 
competition  consists,  indeed,  very  largely  in  the  forgctful- 
ncss  of  other  facts  which  are  equally  material :  that  our  for- 
eign trade  itself  is  not  everything  to  us,  but  is,  after  all, 
only  a  fraction  of  our  whole  business ;  that  long  before  com- 
petition can  diminish  that  trade  materially  it  must  produce 


iiii 


'  1 
1  i 


I 
r. 


:h\ 


^1 


■m 


^1, 


'*!,' 


372 


ECONOMIC  HISTORY. 


I' 


II  (" 


a  fall  of  wages,  while  wages  abroad  will  rise  if  foreign  trade 
increases ;  and  that  although  foreign  countries  increase  their 
manufactures,  we  arc  not  necessarily  ruined, —  probably  we 
arc  greatly  gainers.  To  take  what  seems  as  formidable  a 
case  of  possible  competition  with  us  as  any  that  is  threat- 
ened, namely,  the  increase  of  the  American  iron  and  coal 
industries  under  natural  conditions.  It  seems  probable 
enough  that  in  course  of  time  these  industries  will  bo  very 
largely  developed  in  the  United  States.  The  people  have 
natural  aptitude  and  skill,  and  other  advantages,  and  they 
may  produce  iron  manufactures  cheaper  than  they  can  buy 
them  abroad.  In  time  they  may  export  them  to  other  coun- 
tries. But  how  is  England  necessarily  the  poorer  for  that, 
and  how  much  ?  We  may  come  to  export  a  smaller  quantity 
of  our  iron  manufactures  to  the  United  States  than  in  the 
years  before  1872 ;  but  at  most  we  shall  only  lose  the  profit 
on  so  much  trade,  not  the  whole  value  of  what  we  sold  to  the 
United  States,  which  was,  in  comparison  with  our  whole 
trade,  by  no  means  a  large  sum.  Nor  shall  we  even  lose  the 
whole  profit.  We  can  only  lose  the  difference  of  profit  be- 
tween what  was  derived  from  that  trade  and  the  return  on 
the  less  profitable  trade,  into  which  a  portion  of  our  capital 
and  labor  are  diverted.  Possibly,  also,  the  growth  of  the 
world  may  be  such  that  the  expansion  of  American  industry 
will  not  be  exclusive  of,  but  will  be  coincident  with  a  simi- 
lar expansion  of  our  own,  — there  may  be  room  for  both  of 
us.  In  that  case,  there  would  be  no  reduction  of  the  profits 
on  our  own  trade  at  all,  although  America  had  become  an 
exporter  of  iron  manufactures.  Ux  liyjyothesi  the  increase  of 
the  American  iron  trade  would  also  mean  that  America  be- 
comes richer,  and  consequently  a  better  customer  to  the 
world  generally  for  other  things,  — thus  causing  an  increase 
of  the  general  prosperity  in  which,  with  our  extended  and 
various  trade,  we  could  not  but  participate.  Worse  things 
may  thus  happen  to  us  than  a  natural  extension  of  the  Amer- 
ican iron  trade ;  and  if  it  is  extended  by  protection  only,  it 
can  of  course  do  us  still  less  harm.  There  is  something 
essentially  unsound,  therefore,  in  the  continual  references  to 


5ii 


THE  LIQUIDATIONS  OF  1873-1876. 


373 


the  increase  of  manufacturing^  abroad.  Our  concern  should 
rather  be  to  have  that  inanufacturinfij  increase.  To  antici- 
pate that  the  world  outside  England  is  to  be  merely  agricul- 
tural or  mining,  is  to  anticipate  the  maintenance  throughout 
the  world  of  the  least  productive  forms  of  applying  human 
industry,  and  of  low  purchasing  power  among  other  coun- 
tries. What  mankind  re([uire  for  the  greater  efliciency  of 
their  labor  is  that  the  proportion  of  people  employed  in 
{igriculture  and  mining  should  diminish,  and  more  and  more 
attention  should  be  given  to  other  forms  of  industry.  How 
England  should  grow  poorer  as  this  transformation  is  being 
effected,  it  is  difficult  to  imagine.  It  appears  to  be  as  clear 
as  any  proposition,  that  the  general  increase  of  production, 
leading  to  still  greater  varieties  and  subdivisions  of  manu- 
facturing than  those  which  now  obtain,  must  benefit  most  of 
all  the  countries  like  England,  which  have  got  the  start  of 
others,  and  possess  all  the  best  manufacturing  appliances. 

We  should  fully  expect,  then,  when  the  liquidations  which 
have  been  in  progress  are  over,  to  see  once  more  a  great 
revival  of  prosperity.  Still  more,  according  to  all  former 
experience,  the  prosperity  to  come  must  be  even  greater  than 
anything  yet  seen.  Ever  since  1844  there  has  been  an 
ascending  scale  in  the  rate  of  our  industrial  advance.  The 
years  after  1848-49  were  more  prosperous  than  any  before, 
but  the  prosperity  of  1863-65  exceeded  that  of  1850-53,  just 
as  the  prosperity  of  1870-73  exceeded  that  of  1863-65.  In 
like  manner  the  next  period  of  prosperity  will  probably  ex- 
hibit a  fuller  development  than  1870-73,  and  for  a  similar 
reason,  namely,  that  the  productive  capacity  of  civilized 
nations,  in  proportion  to  their  numbers,  is  annually  increas- 
ing,—  being  capable  of  almost  indefinite  increase.  More 
railways  and  more  machinery,  the  improved  knowledge  of 
chemical  and  other  arts,  imply  that,  one  year  with  another, 
in  proportion  to  their  population,  civilized  communities  can 
produce  more  real  wealth  than  they  did  before.  Depression 
comes  at  times  because  mistakes  have  been  made,  and  the 
wrong  things  are  produced ;  but  when  the  mistakes  are  cor- 
rected, or  some  new  favorable  influence  operates,  such  as  a 


m 


['! 


r 


II 


f)  -t 


i   . 


fo.lv/ 1    t; 


F^  i  'U 


kit" 


\mi 


i    !! 


I    11 
i    i| 


874 


ECONOMIC  HISTORY. 


good  harvest,  the  tide  flows  again,  industrial  communities 
work  up  to  their  full  power,  and  they  are  all  richer  than  be- 
fore. Possibly  the  workmen  at  a  given  place  may  take  out 
their  share  of  the  increased  production  in  the  privilege  of 
working  fewer  hours;  but  the  prospciity  is  there,  however 
it  may  be  enjoyed.  The  great  extension  of  railways  through- 
out the  world  in  aatici])ation  of  real  wants,  which  was  the 
mistake  of  the  period  of  inflation,  should,  now  that  the  mis- 
take has  been  paid  for,  contribute  to  a  more  rapid  advance  of 
general  ])rosperity  than  would  take  place  if  the  world  had 
fewer  railways.  .  .  .    [1877.1] 

•  It  is  obvious  that  if  I  were  now  writing  I  should  have  to  speak  of  the  liqui- 
dations, not  of  tliose  years  only  1187;]-76],  but  of  1873-70,  and  have  to  explain 
more  points  than  I  could  possibly  take  up  when  writing  in  1877.  But  I  see  no 
reason  to  doubt  the  general  soundness  of  the  view  I  have  expressed  on  the  course 
of  tiie  present  depression  and  its  origin  ;  although,  subsequent  to  the  date  of  my 
writing,  bad  harvests  and  other  accidents  have  aggravated  that  depiession 
[1870].— 11.  G. 


INCREASE  OF  POPULATION. 


375 


inmuiiitios 
)r  than  bo- 
ty  take  out 
•ivilogo  of 
I,  however 
8  through- 
li  was  the 
t  the  mis- 
id  vanco  of 
rt'orld  had 


'•  of  the  liqui- 
■e  to  explain 
But  I  see  no 
tn  the  course 
e  (late  of  my 
t  dep^'cssion 


XV. 


THE  UNITED   STATES  IN  1880. 

THE  INCREASE  OF  POPULATION  FROM  1700  TO  1880. 

From  Walker  and  Gannett's  IIefout  on  the  Progre88  of  the 
Nation.     Tenth  Census,  Vol.  I.,  pp.  xii-xx. 

1790. 

THE  first  Census  of  the  United  States,  taken  as  of  the 
first  ]\Ionday  in  August,  1790,  under  the  provisicas  of 
the  second  section  of  the  first  article  of  the  Constitution 
showed  the  population  of  tho  thirteen  States  then  existing 
and  of  the  unorganized  territory  to  be,  in  the  aggregate, 
3,929,21-1. 

This  population  was  distributed  almost  entirely  on  the 
Atlantic  seaboard  extending  from  the  eastern  boundary  of 
Maine  nearly  to  Florida,  and  in  the  region  known  as  the 
Atlantic  plain.  Only  a  very  small  proportion  of  the  inhabi- 
tants of  the  United  States,  not,  indeed,  more  than  five  i)er 
cent,  was  then  to  be  found  west  of  the  system  of  the  Appala- 
chian mountains.  The  average  depth  of  settlement,  in  a 
direction  at  right  angles  to  the  coast,  was  255  miles.  The 
densest  settlement  was  found  in  eastern  Massachusetts, 
Rhode  Island,  and  Connecticut,  and  about  New  York  City, 
whence  population  had  extended  northward  up  the  Hudson, 
and  was  already  quite  dense  as  far  as  Albany.  The  settle- 
ments in  Pennsylvania,  which  had  started  from  Philadelphia, 
on  the  Delaware,  had  extended  nor^^heastward  and  formed  a 
solid  body  of  occupation  from  New  York  through  Phila- 
delphia down  to  the  upper  part  of  Delaware. 

The  Atlantic  coast,  as  far  back  as  the  limits  of  tide- 
water, was  well  settled  at  that  time  from  Casco  Bay  south- 


M 


1 .' ,  > 


v. 


I    ^'1 


H 


■:^* 


m 


''*', 

m 


376 


ECONOMIC  HISTORY. 


ill 


m 


ti 


M\ 


I   'I 


!ti  !;> 


ward  to  the  nortlKM-ii  border  of  North  Carolina.  In  ^\l»at 
was  then  the  Ditttriiit  of  Maine,  sparse  scittlenicnts  extended 
aloii"^  the  whole  seaboard.  The  southern  two  thirds  of  New 
JIanipshire  and  nearly  all  of  Vermont  were  covored  by  jxtpu- 
lation.  In  New  York,  branching  olf  from  the  Hudson  at  the 
mouth  of  the  ^fohawk,  the  line  of  jtopulation  followed  up  a 
broad  gap  between  the  Adirondaeks  and  the  Catskills,  and 
even  reached  beyond  the  centre  of  the  State,  oeeupying  the 
whole  of  the  Mohawk  valley  and  the  country  about  the  inte- 
rior New  York  lakes.  In  Pennsylvania  i)oj)u]ation  had 
spread  northwestward,  occupying  not  only  the  Atlantic  plain, 
but  with  8j)ar8e  settlements  the  region  traversed  by  the 
numerous  ])arallel  ridges  of  the  eastern  portion  of  the  Appa- 
lachians. The  general  limit  of  settlement  was  at  that  time 
the  southeastern  edge  of  the  Allegheny  plateau,  but  beyond 
this,  at  the  junction  of  the  Allegheny  and  Monongahcla 
rivers,  a  point  early  occupied  for  military  purposes,  consid- 
eral)le  settlements  had  been  established  prior  to  the  War  of 
the  Revolution.  In  Virginia  settlements  had  extended  west- 
ward beyond  the  Blue  Ridge,  and  into  what  is  now  West 
Virginia,  on  the  western  slope  of  the  Allegheny  mountains, 
though  very  sparsely.  From  Virginia  also  a  narrow  tongue 
of  settlement  had  penetrated  down  to  the  head  of  the  Ten- 
nessee River,  in  the  great  Appalachian  valley.  In  North 
Carolina  the  settlements  were  abruptly  limited  by  the  base  of 
the  Appalachians.  The  State  was  occupied  with  remarkable 
nniformity,  except  in  its  southern  and  central  portion,  where 
population  was  comparatively  sparse.  In  South  Carolina,  on 
the  other  hand,  there  was  evidence  of  much  natural  selection 
apparently  with  reference  to  the  character  of  soils.  Charles- 
ton was  then  a  city  of  considerable  magnitude,  and  about  it 
was  grouped  a  comparatively  dense  population;  but  all  along 
a  belt  running  southwestward  across  the  State  near  its  cen- 
tral part  the  settlement  was  very  sparse.  This  area  of  sparse 
settlement  joined  with  that  of  central  North  Carolina,  and 
ran  eastward  to  the  coast  near  the  junction  of  the  two  States. 
Further  westward  in  the  "up  country"  of  South  Carolina, 
the  density  of  settlement  was  noticeably  due  to  the  improve- 


»(' 


INCREASE   OF  POPULATION. 


877 


inont  in  soil.  At  this  diih)  sc'ttU'inc'iits  were  almost  entirely 
agricultural,  and  the  causes  for  variuticju  in  their  density 
wore  general  ones.  The  movements  of  population  at  this 
epoch  may  ho  traced  in  almost  every  case  to  the  character  of 
the  soil,  and  to  facility  of  transportation  to  the  seaboard; 
and  as  the  inhabitants  v/erc  then  dependent  mainly  upon 
water  transportatit)n,  we  find  the  settlements  also  conform- 
ing themselves  very  largely  to  the  navigable  streams. 

Outside  the  area  of  continuous  settlement,  which  we  have 
attempted  to  sketch,  were  found  in  17'JO  a  nmnber  of  smaller 
settlements  of  greater  or  less  extent.  The  principal  of  these 
lay  in  northern  Kentucky,  bordering  upon  the  Ohio  River, 
comprising  an  area  of  10,900  s(piare  miles.  Another  in 
western  Virginia  lay  upon  the  Ohio  and  Kanawha  rivers, 
and  comprised  7^)0  square  miles.  A  third  in  Tennessee, 
upon  the  Cumberland  River,  embraced  1,200  square  miles. 

In  addition  to  these,  there  were  a  score  or  more  of  small 
posts,  or  incipient  settlements,  scattered  over  what  was  then 
an  almost  imtroddcn  wilderness,  such  as  Deti'oit,  Yincennes, 
Kaskaskia,  Prairie  du  Chien,  Mackinac,  and  Green  Bay, 
besides  the  humble  beginnings  of  Elmira  and  Binghamton, 
in  New  York,  which,  even  at  that  time  lay  outside  the  body 
of  continuous  settlement. 

Following  the  line  which  limits  this  great  body  of  settle- 
ment in  all  its  undulations,  we  find  its  length  to  be  3,200 
miles.  In  this  measurement  no  account  has  been  made  of 
slight  irregularities,  such  as  those  in  the  ordinary  meandcr- 
ings  of  a  river  which  forms  the  boundary  line  of  population ; 
but  we  have  traced  all  the  ins  and  outs  of  this  frontier  line, 
which  seem  to  indicate  a  distinct  change  in  the  settlement  of 
the  country  for  any  cause,  whether  of  progression  or  of  retro- 
gression. The  area  of  settlement,  thus,  is  the  area  embraced 
between  the  frontier  line  and  the  coast,  diminished  by  such 
unsettled  areas  as  may  lie  within  it,  and  increased  by  such 
as  lie  without  it.  These  are  not  susceptible  of  very  accurate 
determination,  owing  to  the  fact  that  our  best  maps  arc,  to  a 
certain  extent,  incorrect  in  boundaries  and  areas;  but  all 
the  accuracy  required  for  our  present  purpose  can  bo  secured. 


i>i 


■■I 


ii 


'if' 


'm 


m\ 


i  Vi. 


m 


;f.4*: 


'iff 


1 1 


378 


ECONOMIC  HISTORY. 


Y 

it    " 


i,!> 


The  settled  area  of  1790,  as  indicated  by  the  line  traced,  is 
220,085  s(iuare  miles.  The  entire  body  of  continuously  set- 
tled area  lay  between  31°  and  45°  north  latitude  and  67° 
and  83°  west  longitude. 

Outside  of  this  body  of  continuous  settlement  are  the 
smaller  areas  mentioned  above,  which,  added  to  the  main 
body  of  settled  area,  give  as  a  total  239,935  square  miles, 
the  aggregate  population  being  3,929,214,  and  the  average 
density  of  settlement  16.4  to  the  square  mile. 

In  1790  the  District  of  Maine  belonged  to  ]\Iassachusctts. 
Georgia  comprised  not  only  the  present  State  of  that  name, 
but  nearly  all  of  what  are  now  the  States  of  Alabama  and  Mis- 
8issipj)i.  The  States  of  Kentucky  and  Tennessee  were  then 
known  as  the  "Territory  south  of  the  Ohio  River,"  and  the 
present  States  of  Ohio,  Indiana,  Illinois,  Michigan,  Wisconsin, 
and  part  of  Minnesota,  as  the  "  Territory  northwest  of  the  Ohio 
River. "  Si)ain  claimed  possession  of  what  is  now  Florida, 
with  a  strij)  along  the  southern  border  of  Alabama,  Missis- 
sii)pi,  and  all  of  the  region  west  of  the  Mississippi  River. 

An  inspection  of  the  maps  relating  to  the  earlier  census 
years  will  show  that  the  progress  of  population  westward 
across  the  Appalachian  system  has  taken  place,  in  the  main, 
along  four  lines.  The  northernmost  of  those,  which  was  the 
first  to  be  developed,  runs  through  Central  New  York,  fol- 
lowing u]>,  generally,  the  Mohawk  River.  This  line  has, 
throughout  our  history,  been  one  of  the  principal  courses 
of  population  in  its  westward  flow.  The  second  crosses 
southern  Pennsylvania,  western  Maryland,  and  northern 
Virginia,  parallel  to  and  along  the  course  of  the  upper 
Potomac.  The  third  runs  through  Virginia,  passing  south- 
westward  down  the  great  Appalachian  valley,  crossing  thence 
over  into  Kentucky  and  Tennessee.  South  of  this,  the  prin- 
cipal movement  westward  has  been  around  the  end  of  the 
Appalachian  chain,  through  Georgia  and  Alabama. 


m^^M 


1800. 


At  the  Second  Census,  that  of  1800,  the  frontier  line,  as 
it  appears  on  the  map,  has  been  rectified,  so  that  while  it 


INCREASE   OF  POPULATION. 


379 


c  traced,  is 
mously  set- 
idc  and  G7° 

nt  are  the 

the  main 

larc  miles, 

lie  average 

sachusetts. 
liat  name, 
a  and  Mis- 
wei-e  then 
"  and  the 
Wisconsin, 
)f  the  Ohio 
V  Florida, 
a,  Missis- 
River, 
ier  eensus 
westward 
he  main, 
I  was  the 
ork,  fol- 
ino  has, 
courses 
crosses 
northern 
le  upper 
g  south- 
thence 
he  prin- 
of  the 


line,  as 
tN'hile  it 


embraces  282,208  square  miles,  it  describes  a  course,  when 
measured  in  the  same  manner  as  that  of  1790,  of  only  2,800 
lineal  ni'les.  The  advancement  of  this  line  has  taken  place 
in  every  direction,  though  in  some  parts  of  the  country  much 
more  markedly  than  in  others. 

In  Maine  and  New  Hampshire  there  is  apparent  only  a 
slight  northward  movement  of  settlement;  in  Vermont,  on 
the  other  hand,  while  the  settled  area  has  not  decidedy  in- 
creased, its  density  has  become  greater.  Massachusetts 
shows  but  little  change,  but  in  Connecticut  the  settlements 
along  the  lower  course  of  the  Connecticut  River  have  appre- 
ciably increased. 

In  New  York  settlement  has  poured  up  the  Hudson  to  the 
mouth  of  the  Mohawk,  and  thence  through  the  great  natural 
roadway  westward.  The  narrow  tongue  which  before  ex- 
tended out  beyond  the  middle  of  the  State  has  now  widened 
until  it  spreads  from  the  southern  border  of  the  State  to  Lake 
Ontario.  A  narrow  belt  of  settlement  even  stretches  d(jwn 
the  St.  Lawrence,  and  along  all  the  northern  border  of  the 
State,  to  Lake  Champlain,  completely  surrounding  what 
may  be  characteristically  defined  as  the  Adiroiulack  region. 

In  Pennsylvania  settlements  have  extended  up  the  Susque- 
hanna and  joined  the  New  York  groujjs,  leaving  as  yet  an 
unsettled  space  in  the  northeast  corner  of  the  State,  which 
comprises  a  body  of  rugged  mountain  country.  With  the 
cxcei)tion  of  a  little  strip  along  the  western  liorder  of  Penn- 
sylvania, the  northern  part  of  the  State,  Avest  of  the  Sus(pie- 
lianna,  is  as  yet  entirely  without  inhal)itaiits.  Population 
has  streamed  across  the  southern  half  of  the  State,  and  sot- 
tied  in  a  dense  body  about  the  forks  of  the  Ohio  River,  at  the 
present  site  of  Pittsburgh,  and  thence  extended  slightly  into 
the  State  of  Ohio.  In  Virginia  we  note  but  little  change, 
although  there  is  a  general  extension  of  settlement,  with  an 
increase  in  density,  especially  along  the  coast.  North  Caro- 
lina is  now  almost  entirely  covered  with  population;  the 
mountain  region  has,  generally  si)eaking,  been  nearly  all 
reclaimed  to  the  service  of  man.  In  South  Carolina  there 
is  a  general   increase  in  density  of  settlement,  while  the 


*  t 


■!i. 

I  hi- 

if'!' 


!!:' 


ECONOMIC  HISTORY. 


southwestern  border  has  been  carried  down  until  now  the 
Altamaha  River  is  its  limit.  The  incipient  settlements  in 
northern  Kentucky  have  spread  southward  across  the  State, 
and  even  into  Tennessee,  forming  a  junction  with  the  little 
settlement,  noted  at  the  date  of  the  last  census,  on  the  Cum- 
berland River.  The  group  thus  formed  has  extended  down 
the  Ohio,  nearly  to  its  junction  Avith  the  Tennessee  and  the 
Cumberland,  and  across  the  Ohio  River  into  the  present  State 
of  Ohio,  where  we  note  the  beginning  of  Cincinnati.  Other 
infant  settlements  appear  at  this  date.  On  the  east  side  of 
the  Mississii)pi  River,  in  the  present  State  of  Missi8sii)pi,  is 
a  strip  of  settlement  along  the  bluffs  below  the  Yazoo 
bottom.  Besides  the  settlement  on  the  present  site  of  St. 
Louis,  not  u,  this  time  within  the  United  States,  is  an  adja- 
cent settlement  in  what  is  noAV  Illinois,  while  all  the  pioneer 
settlements  i)reviously  noted  have  grown  to  a  greater  or  less 
extent. 

From  the  region  embraced  between  the  frontier  line  and 
the  Atlantic  must  be  deducted  the  Adirondack  tract,  in 
northern  New  York,  and  the  unsettled  region  in  northern 
Pennsylvania  already  referred  to;  so  that  the  actual  area  of 
settlement,  bounded  by  a  continuous  line,  is  to  be  taken  at 
271,908  square  miles.  All  this  lies  between  30°  45'  and 
45°  15'  north  latitude,  and  67°  and  88°  west  longitude. 

To  this  should  be  added  the  aggregate  extent  of  all  settle- 
ments lying  outside  of  the  frontier  line,  which  collectively 
amount  to  38,800  square  miles,  making  a  total  area  of  settle- 
ment of  305,708  square  miles.  As  the  aggregate  population 
is  .5,308,483,  the  average  density  of  settlement  is  17.4. 

The  infant  settlements  of  this  period  have  been  much  re- 
tarded at  many  ]H>ints  by  the  opposition  of  the  Indian  tribes; 
)ut  in  the  neigliborhood  of  the  more  densely  settled  portions 
of  the  northern  part  of  the  country  these  obstacles  have  been 
of  less  magnitude  than  farther  south.  In  Georgia,  espe- 
cially, the  large  and  powerful  tribes  of  Creeks  and  Cherokees 
have  stubbornly  opposed  the  progress  of  population. 

During  the  decade  just  past  Vermont,  formed  from  a  part 
of  New  York,  has  been  admitted  to  the  Union ;  also  Ken- 


INCREASE  OF  POPULATION. 


381 


'* 


tucky  and  Tennessee,  formed  from  the  "Territory  south  of 
the  River  Ohio ;  "  Mississippi  Territory,  having  however  very 
different  boundaries  from  the  present  State  of  that  name, 
has  been  organized;  while  the  "territory  northwest  of  the 
River  Ohio  "  has  been  divided  and  Indiana  Territoi-y  organ- 
ized from  the  western  portion. 

1810. 

At  1810  we  note  great  changes,  especially  the  extension  of 
the  sparse  settlements  of  the  interior.  The  hills  of  western 
New  York  have  become  almost  entirely  covered  with  popula- 
tion, which  has  spread  along  the  south  shore  of  Lake  Erie 
well  over  into  Ohio,  and  has  effected  a  junction  with  the 
previously  existing  body  of  population  about  the  forks  of  the 
Ohio  River,  leaving  unsettled  an  included  heart-shaped  area 
in  northern  Pennsylvania,  which  comprises  the  rugged  coun- 
try of  the  Appalachian  plateau.  The  occupation  of  the  Ohio 
River  has  now  l)ecomc  complete,  from  its  head  to  its  mouth, 
with  the  exception  of  small  gaps  below  the  mouth  of  the 
Tennessee.  Spreading  in  every  direction  from  the  "dark 
and  bloody  ground  "  of  Kentucky,  settlement  covers  almost 
the  entire  State,  while  the  southern  border  line  has  been 
extended  to  the  Tennessee  River,  in  northern  Alabama.  In 
Georgia  settlements  are  still  held  back  by  the  Creek  and  the 
Cherokee  Indians,  although  in  1802  a  treaty  with  the  former 
tribe  relieved  the  southwestern  portion  of  the  State  of  their 
presence,  and  left  the  ground  open  for  occui)ancy  by  the 
whites.  In  Ohio  settlements,  starting  from  the  Ohio  River 
and  from  southwestern  Pennsylvania,  liavc  worked  northward 
and  westward,  until  they  cover  two  thirds  of  the  area  of  the 
State.  Michigan  and  Indiana  are  still  virgin  territory,  with 
the  excei)tion  of  a  little  strip  about  Detroit,  in  the  former 
State,  and  a  small  area  in  the  southwestern  part  of  the  lat- 
iov.  St.  Louis,  from  a  fur-trading  ])()st,  has  become  an 
important  centre  of  settlement,  population  having  spread 
northward  above  the  mouth  of  the  Missoiiri  and  southward 
along  the  Mississippi  to  the  mouth  of  the  Ohio.  At  the 
mouth  of  the  Arkansas,  in  what  is  now  the  State  of  Arkan- 


r.slff 


n 


tv 


II:, 


I 


ff 


f 


lll^'' 


I' 


\:iii 


m 


till 


If    i       \ 


vi  r  c ;  •  ! 


■I' 

!:; 


:i 


U:  ?. 


382 


ECONOMIC  HT STORY. 


sas,  is  a  similar  body  of  settlement.  The  transfer  of  the 
Territory  of  Louisiana  to  our  jurisdiction,  which  was  effected 
in  1803,  has  brought  into  the  country  a  large  body  of  popula- 
tion, which  stretches  along  the  ^lississippi  River  from  its 
mouth  nearly  u])  to  the  present  noi'thern  limit  of  the  State  of 
Louisiana,  up  the  Red  River  and  the  St.  Francis,  in  general 
occu|)ying  the  alluvial  regions.  The  incipient  settlements 
noted  on  the  last  map  in  ^lississippi  have  effected  a  junction 
with  those  of  Louisiana,  while  in  Lower  Alabama  and  Mis- 
sissi]»pi  a  similar  patch  ajjpears  upon  the  ]\Iobile  and  the 
Pearl  rivers. 

In  this  decade  large  additions  have  been  made  to  the  terri- 
tory of  the  United  States,  and  many  chiinges  have  been 
effected  in  the  lines  of  interior  division.  The  i)urcliase  of 
Louisiana  has  added  1,124,08")  square  miles,  an  oni])irc  in  it- 
self, to  the  United  States  and  has  given  to  us  alisolute  control 
of  the  Mississippi  and  its  navigable  branches.  Georgia,  dur- 
ing the  same  jjcriod,  has  ceded  to  the  United  States  the  por- 
tion of  its  territory  which  now  constitutes  the  larger  part  of 
the  States  of  Ala))ama  and  Mississippi.  The  State  of  Ohio 
has  been  formed  from  a  j)ortion  of  what  previously  was  known 
as  the  "  Territory  north  of  the  Ohio  River. "  Michigan  Terri- 
tory has  been  erected,  comprising  what  is  now  the  lower  pen- 
insula of  Michigan;  Indiana  Territory  has  been  restricted  to 
the  ])resent  limits  of  the  State  of  that  name;  Illinois  Terri- 
tory conijjrises  all  of  the  present  State  of  Illinois,  with  that  of 
Wisconsin  and  apart  of  Minnesota;  while  from  the  Louisiana 
])urchase  has  been  carved  imder  the  name  of  the  "  Territory 
of  Orlenns"  all  that  ])art  of  the  present  State  of  Louisiana 
which  lies  west  of  the  Mississippi  river,  the  remiiinder  of  the 
great  territory  so  chea])ly  accpiired  from  France  being  known 
by  the  name  of  the  "Louisiana  Territory." 

At  this  date  the  frontier  line  is  2.900  miles  long  and  in- 
cludes l)('tween  itself  nnd  the  Atlantic  408,80")  s(|uare  miles. 
From  this  must  be  deductcMJ  several  large  areas  of  unsettled 
land ;  first,  the  area  in  northern  New  York,  now  somewhat 
smaller  than  ten  years  before,  but  still  by  no  means  inconsid- 
erable in  extent;  second,  the  heart-shaped  area  in  north- 


INCREASE  OF  POPULATION. 


383 


sfcr  of  the 
as  effected 
of  populn- 
r  from  its 
lie  State  of 
in  general 
ottlements 
a  junction 
I  and  Mis- 
i  and  the 

the  terri- 

lave   been 

u'diasc  of 

pirc  in  it- 

te  control 

r,u;ia,  dur- 

s  tlic  por- 

;er  part  of 

c  of  Ohio 

as  known 

Terri- 

nvcr  i)en- 

ricted  to 

is  Terri- 

1  that  of 

niisiana 

'crritory 

)iiisiana 

er  of  the 

g  known 

and  in- 
e  miles, 
nscttlcd 
iiicwluit 
iconsid- 
L  north- 


western Pennsylvania  embracing  part  of  the  Allegheny  pla- 
teau, in  size  about  equal  to  the  imscttled  area  in  New  York; 
third,  a  sti-ip  along  the  central  part  of  what  is  now  West  Vir- 
ginia, extending  from  the  Potomac  southward,  taking  in  what 
is  now  a  part  of  eastern  Kentucky  and  southwestern  V^irginia, 
and  extending  nearly  to  the  border  line  of  Tennessee ;  fourth, 
a  comparatively  small  area  in  northern  Tennessee  upon  the 
Cumberland  plateau.  These  tracts  together  comprise  20,050 
S(piarc  miles,  making  the  actual  area  of  settlement  included 
within  the  frontier  line  382,845  square  miles.  All  this  lies 
between  latitude  29°  30'  and  45°  15'  north,  and  between  the 
meridians  of  07°  and  88"  30'  west. 

Beyond  the  frontier  there  are,  in  addition  to  thi  steadily 
increasing  number  of  outposts  and  minor  settlements,  several 
considerable  bodies  of  population,  which  have  been  above 
noted.  The  aggregate  extent  of  these,  and  of  the  numerous 
small  patches  of  population  scattered  over  the  West  and 
South,  may  bo  estimated  at  25,100  square  miles,  making  the 
total  area  of  settlement  in  1810  407,945  square  miles;  the 
aggregate  population  being  7, 239, 881,  and  the  average  density 
of  settlement  17.7  to  the  square  mile. 

Between  1800  and  1810  the  principal  territorial  changes 
have  been  as  follows:  Ohio  has  been  admitted,  and  the 
Territories  of  Illinois  and  Michigan  have  been  formed  from 
parts  of  Indiana  Territory. 

j.620. 

The  decade  from  1810  to  1820  has  witnessed  several  terri- 
torial changes.  Florida  at  this  date  (1820)  is  a  l)lank  u]ion 
the  maj).  The  treaty  with  Spain,  which  gives  her  to  us,  is 
signed,  but  the  delivery  has  not  yet  taken  place.  Alabama 
and  Mississippi,  made  from  the  Mississippi  Territory,  have 
been  organized  and  admitted  as  States.  Indiana  and  Illinois 
appear  as  States  Avith  their  present  limits.  The  Territory  of 
Louisiana  has  been  admitted  as  a  Slate.  The  District  of 
Maine  has  also  been  erected  into  a  State.  Arkansas  Terri- 
tory has  been  cut  from  the  southern  portion  of  the  Teiritory 
of  Louisiana.     The  Indian  Territory  has  been  constituted  to 


'■    >■: 


I   ifli 


fit 


m 


384 


ECONOMIC  HISTORY. 


serve  as  a  reservation  for  the  Indian  tribes.  Michigan 
Territory  has  been  extended  to  include  all  of  the  ])resent 
States  of  Michigan,  Wisconsin,  and  part  of  Minnesota. 
That  part  of  the  old  Louisiana  Territory  remaining,  after 
cuttin'^  out  Arkansas  and  Indian  Territory,  has  received  the 
name  of  "Missouri  Territory." 

Again,  in  1820,  we  note  a  great  change  in  regard  to  the 
frontier  line.  It  has  become  vastly  more  involved  and  com- 
plex, extending  from  southeastern  Michigan,  on  Lake  St. 
Clair,  south  westward  into  what  is  now  Missouri;  thence 
making  a  great  semicircle  to  the  eastward,  it  sweeps  west 
again  around  a  body  of  jjopulation  in  Louisiana,  and  ends  on 
the  Gulf  coast  in  that  State.  The  area  included  by  it  has 
immensely  increased,  but  much  of  this  increase  is  balanced 
by  the  great  extent  of  unsettled  land  included  Avithin  it. 

Taking  up  the  changes  in  detail,  avc  note,  fii-st,  the  great 
increase  in  the  population  of  central  Now  York,  a  belt  of 
increased  settlement  having  swei)t  up  the  Mohawk  valley  to 
Lake  Ontario,  and  along  its  shore  nearly  to  the  Niagara 
River.  A  similar  increase  is  seen  about  the  forks  of  the 
Ohio  River,  while  in  northern  Pennsylvania  the  unsettled 
region  on  the  Ai)palachian  plateau  has  sensibly  decreased  in 
size.  The  unsettled  area  in  western  Virginia  and  eastern 
Kentucky  has  very  greatly  diminished,  poijulation  having 
extended  almost  entirely  over  the  Allegheny  region  in  these 
States.  The  little  settlements  about  Detroit  have  extended 
and  spread  ahmg  the  shore  of  Lake  Er  o,  until  they  have 
joined  those  in  Ohio.  The  frontier  lii.(j  in  Ohio  has  crept 
northward  and  Avestward,  leaving  only  the  northwestern 
corner  of  the  State  unoccupied.  Population  has  spread 
northward  from  Kentucky  and  westward  from  Ohio  into 
southern  Indiana,  covering  sparsely  tlic  lower  third  of  that 
State.  The  groups  of  population  around  St.  Louis,  wliicli  at 
the  time  of  the  previous  census  were  enjoying  a  rapid 
growth,  have  extended  widely,  making  a  junction  with  the 
settlements  of  Kentucky  and  Tennessee,  along  a  broad  belt 
in  southern  Illinois;  following  the  main  watercourses,  popu- 
lation has  gone  many  scores  of  miles  up  the  Mississippi  and 


1'  I 


INCREASE   OF  POPULATION. 


385 


the  Missouri  rivers.  The  settlements  in  Alabama,  which 
up  to  this  time  had  been  very  much  retarded  by  the  Creelvs, 
were  rapidly  re-enforced  and  extended,  in  consequence  of  the 
victory  of  General  Jackson  over  this  tribe  and  the  subse- 
quent cession  of  portions  of  this  territory.  Immigration  to 
Alabama  has  already  become  considerable,  and  in  a  short 
time  the  whole  central  portion  of  the  State,  embracing  a 
large  part  of  the  region  drained  by  the  Mobile  River  and  its 
branches,  will  be  covered  by  settlements,  to  extend  north- 
ward and  clTect  a  junction  with  the  Kentucky  and  Tennessee 
settlements,  and  westward  across  the  lower  part  of  Missis- 
sippi until  they  meet  the  Louisiana  settlements.  In  Georgia 
the  Cherokces  and  the  Creeks  still  hold  settlement  back 
along  the  line  of  the  Altamaha  River.  There  are,  however, 
scattered  bodies  of  population  in  various  parts  of  the  State, 
though  of  small  extent.  In  Louisiana  wo  note  a  gradual 
increase  of  the  extent  of  redeemed  territory,  which  appears 
to  have  been  limited  almost  exactly  by  the  borders  of  the 
alluvial  region.  In  Arkansas  the  settlements,  which  we  saw 
at  1810  at  the  mouth  of  the  Arkansas  River,  have  extended 
up  the  bottom  lands  of  that  river  and  of  the  Mississippi,  form- 
ing a  body  of  population  of  considerable  size.  i3csides  these 
a  small  body  is  found  in  the  southern  central  part  of  the 
State,  at  the  southeastern  base  of  the  hill  region,  and  another 
in  the  prairie  region  in  the  northern  part. 

The  frontier  line  now  has  a  length  of  4,100  miles,  em- 
bracing an  area,  after  taking  out  all  the  unsettled  regions 
included  between  it,  the  Atlantic,  and  the  Gulf,  of  504,517 
square  miles,  all  lying  between  29°  30'  and  45°  30'  north 
latitude,  and  between  G7°  and  93°  45'  west  longitude.  Out- 
side the  frontier  lino  are  some  l)odics  of  population  on  the 
Arkansas,  White,  and  Washita  rivers,  in  Arkansas,  as  before 
noted,  as  well  as  some  small  bodies  in  the  Northwest.  Com- 
puting these  at  4,200  square  miles  in  the  aggregate,  we  have 
a  total  settled  area  of  508,717  square  miles;  the  aggregate 
population  being  9,633,822,  and  the  average  density  of  set- 
tlement 18.9  to  the  square  mile. 

25 


m 


i 


m\ 


«■ 


mm 


■u^- 


if'v 


886 


ECONOMIC  HISTORY. 


1830. 


In  the  decade  from  1820  to  1830  other  territorial  changes 
have  occurred.  lu  the  early  part  of  the  decade  the  Ihial 
transfer  of  Florida  from  Spanish  jurisdiction  was  effected, 
and  it  became  a  Territory  of  the  United  States.  Missouri 
has  been  carved  from  the  southeastern  part  of  the  old  Mis- 
souri Territory,  and  admitted  as  a  Slate.  Otherwise  the 
States  and  Territories  have  remained  nearly  as  before. 
Settlement  during  the  decade  has  again  spread  greatly. 
The  westward  extension  of  the  frontier  does  not  appear  to 
have  been  so  great  as  in  some  former  periods,  the  energies 
of  the  people  being  mainly  given  to  filling  up  the  included 
areas.  In  other  words,  the  decade  from  1810  to  1820  seems 
to  have  been  one  rather  of  blocking  out  work  which  the  suc- 
ceeding decade  has  been  largely  occupied  in  completing. 

During  this  period  the  Indians,  especially  in  the  South, 
have  still  delayed  settlement  to  a  great  extent.  The  Creeks 
and  the  Cherokees  in  Georgia  and  Alabama,  and  the  Choc- 
taws  and  the  Chickasaws  in  Mississippi,  occupy  large  areas 
of  the  best  portions  of  those  States  and  successfully  resist 
encioachment  upon  their  territory.  Georgia,  however,  has 
witnessed  a  large  increase  in  settlement  during  the  decade. 
The  settlements  which  have  heretofore  been  stayed  on  the  line 
of  the  Altamaha  spread  westward  across  the  central  portion 
of  the  State  to  its  western  boundary,  where  they  have  struck 
against  the  barrier  of  the  Creek  territor}'.  Stopped  at  this 
point,  they  have  moved  southward  down  into  the  southwest 
corner,  and  over  into  Florida,  extending  even  to  the  Gulf 
coast.  Westward  they  have  stretched  across  the  southern 
part  of  Alabama,  and  joined  that  body  of  settlement  wl  ich 
was  previously  formed  in  the  drainage-basin  of  the  ]\Iobile 
River.  The  Louisiana  settlements  have  but  slightly  in- 
creased, and  no  great  change  appears  to  have  taken  place  in 
Mississippi,  owing  largely  to  the  cause  above  noted,  namely, 
the  occupancy  of  the  soil  by  Indians.  In  Arkansas  the  spread 
of  settlement  has  been  in  a  strange  and  fragmentary  way. 
A  line  reaches  from  Louisiana  up  the  Arkansas  River  to  the 


fii 


uu 


;Hf  :U 


INCREASE  OF  POPULATION. 


887 


State  line,  where  it  is  stopped  abruptly  by  the  boundary  of 
the  Indian  Territory.  It  extends  up  the  Mississippi,  and 
joins  the  great  body  of  population  in  Tennessee.  A  branch 
extends  northeastward  from  near  Little  Rock  to  the  northern 
portion  of  the  State.  All  these  settlements  within  Arkansas 
Territory  arc  as  yet  very  sparse.  In  Missouri  the  j)rincipal 
extension  of  settlement  has  been  in  a  broad  belt  up  the  Mis- 
souri River,  reaching  to  the  jiresent  site  of  Kansas  City,  at 
the  mouth  of  the  Kansas  River,  where  quite  a  dense  body  of 
l)opulation  aj)pears.  Settlement  has  progressed  in  Illinois, 
from  the  Mississippi  River  eastward  and  northward,  covering 
more  than  half  the  State.  In  Indiana  it  has  followed  up  the 
Wabash  River,  and  thence  has  spread  until  it  reaches  nearly 
to  the  north  line  of  the  State.  But  little  of  Ohio  remains 
unsettled.  The  sparse  settlements  about  Detroit,  in  Michi- 
gan Territory,  have  broadened  out,  extending  into  the  inte- 
rior of  the  State,  while  isolated  patches  have  appeared  in 
various  other  localities. 

Turning  to  the  more  densely  settled  parts  of  the  country, 
wc  find  that  settlement  is  slowly  making  its  way  northward 
in  Maine,  although  discouraged  by  the  poverty  of  the  soil 
and  the  severity  of  the  climate.  The  unsettled  tract  in 
northern  New  York  is  decreasing,  but  very  slowly,  as  is 
also  the  case  with  the  unsettled  area  in  northern  Pennsylva- 
nia. In  western  Virginia  the  unsettled  tracts  arc  reduced 
to  almost  nothing,  while  the  vacant  region  in  eastern  Ten- 
nessee, on  the  Cumberland  plateau,  is  rapidly  diminishing. 

At  this  date,  1830,  the  frontier  line  has  a  length  of  5,300 
miles,  and  the  aggregate  area  now  embraced  Ijetween  the 
ocean,  the  Gulf,  and  the  frontier  line  is  725,406  square 
miles.  Of  this,  however,  not  less  than  97,389  square  miles 
are  comprised  within  the  included  vacant  tracts,  leaving 
only  628,017  square  miles  as  the  settled  area  within  the 
frontier  line,  all  of  which  lies  between  latitude  29°  15'  and 
46"  15'  north,  and  between  longitude  67°  and  95°  west. 

Outside  the  body  of  continuous  settlement  are  no  longer 
found  large  groups,  but  several  small  patches  of  population 
appear  in  Ohio,  Indiana,  Illinois,  Michigan,  and  Wisconsin, 


I 


m 


m. 


\'<:  *Y' 


U .  \  u 

li*    I    Is.."- 


^1% 


I 


III 


Ij 

ll 

\ 

iff  1l 


388 


ECONOMIC  IIISTOHY. 


ugji;ro<,'iiting  4,700  square  miles,  making  a  total  settled  area, 
in  18;]U,  oF  ()!5-,7l7  siiuare  miles.  As  the  aggregate  popula- 
tion is  12,HtJ0,020,  the  average  density  of  settlement  is  20.3 
to  the  scjuare  mile. 

1840. 

During  the  decade  ending  in  1840  the  State  of  Michigan 
has  been  created  with  its  present  limits,  the  rcnuiinder  of  the 
old  territory  being  known  as  Wisconsin  Territory.  Iowa 
Territory  has  been  created  from  a  portion  of  Missouri  Terri- 
tory, embracing  the  present  State  of  Iowa  and  the  western 
part  of  Mimiesota,  and  Arkansas  has  been  admitted  to  the 
Union. 

In  1840  we  find,  by  examining  the  map  of  population  that 
the  process  of  filling  up  and  completing  the  work  blocked 
out  between  1810  and  1820  has  been  carried  still  farther. 
From  Georgia,  Alabama,  and  Mississippi  the  Cherokee, 
Creek,  Choctaw,  and  Chickasaw  Indians,  Avho,  at  the  time 
of  the  previous  census,  occupied  large  areas  in  these  States, 
and  formed  a  very  serious  obstacle  to  settlement,  have  been 
removed  to  the  Indian  Territory,  and  their  country  has  been 
opened  up  to  settlement.  Within  the  two  or  three  yeai-s 
which  have  elajjsed  since  the  removal  of  these  Indians  the 
lands  relin(piished  by  them  have  been  entirely  taken  up, 
and  the  country  has  been  covered  with  a  comparatively  dense 
settlement.  In  northern  Illinois,  the  Sac  and  Fox  and 
Pottawatomie  tribes  having  been  removed  to  the  Indian 
Territory,  their  country  has  been  promptly  taken  ujt,  and 
we  find  now  settlements  carried  over  the  whole  extent  of  In- 
diana, Illinois,  and  across  Michigan  and  Wisconsin  as  far 
north  as  the  forty-third  parallel.  Population  has  crossed 
1ho  ^lississippi  River  into  Iowa  Territory,  and  occupies  a 
broad  belt  up  and  down  that  stream.  In  ^Missouri  the  settle- 
ments have  spread  northward  from  the  Missouri  River  nearly 
to  the  boundary  of  the  State,  and  southward  till  they  cover 
most  of  the  southern  portion,  and  make  connection  in  two 
places  with  the  settlements  of  Arkansas.  The  unsettled  area 
found   in  southern  Missoui'i,  together  with  that   in   north- 


'Ih 


INCREASE  OF  POPULATIOX. 


380 


wostcrn  Arkansas,  is  due  to  the  hilly  and  ruirgcd  nature  ot' 
the  I'ountry,  and  to  the  poverty  of  the  soil,  as  eonipared  with 
the  rieh  prairie  lands  all  around.  In  Arkansas  the  settle- 
ments remain  sparst^  and  have  spread  widely  away  from  the 
streams,  eoveriu}^  much  of  tlic  prairie  ])art8  of  the  State. 
There  is,  besides  the  area  in  northwestern  Ai'knnsas  just 
mentioned,  a  larjre  area  in  the  northeastern  part  of  the 
State,  comprised  almost  entirely  within  the  alluvial  regions 
of  the  St.  Francis  Ilivcr,  and  also  one  in  the  southern  ])ortlon, 
extending  over  into  northern  Louisiana  which  is  entii-ely  in 
the  fertili!  ))rairie  section.  The  fourth  unsettled  region  lies 
in  the  southwest  part  of  the  State. 

In  the  older  States  wc  note  a  gradual  decrease  in  the  unset- 
tled areas,  as  in  Maine  and  in  New  York.  In  northern  Penn- 
sylvania the  unsettled  section  has  entirely  disa|»peared.  A 
small  ])ortion  of  the  unsettled  patch  on  the  Cuml)erland 
plateau  still  remains.  In  southern  Georgia  the  ()keefenoke(! 
swamp  and  the  pine  barrens  adjacent  luive  thus  far  repelled 
settlement,  although  population  has  increased  in  Florida, 
passing  entirely  around  this  area  to  the  south.  The  greater 
part  of  Florida,  however,  including  nearly  all  the  peninsula 
and  several  large  areas  along  the  Gulf  coast,  still  i-cniains 
without  settlement.  This  is  doubtless  due,  in  part,  to  the 
nature  of  the  country,  being  alternately  swamp  and  hum- 
mock, and  in  part  to  the  hostility  of  the  Seminole  Indians, 
who  still  occujjy  nearly  all  of  the  peninsula. 

The  frontier  line  in  1840  has  a  length  of  8,300  miles. 
This  shrinking  in  its  length  is  due  to  its  rectification  on  the 
northwest  and  southwest,  owing  to  the  filling  out  of  the  entire 
interior.  It  encloses  an  area  of  OOOJJ.'jS  sipiare  miles,  all 
lying  between  latitude  29°  and  415"  30'  north,  and  longitu(l(> 
Cu°  and  95°  30'  west.  The  vacant  tracts  have,  as  noted 
above,  decreased,  although  they  are  still  (juite  considerable 
in  Missouri  and  Arkansas.  The  total  area  of  the  vacant 
tracts  is  9.5,51(5  square  miles.  The  settled  area  outside  the 
frontier  line  is  notably  small,  and  amounts,  in  the  aggregate, 
to  only  2,150  miles,  making  the  entire  settled  area  807,292 
square  miles  in  1840.  The  aggregate  ]iopulation  being 
17,009,453,  the  average  density  is  21.1  to  the  square  mile. 


r   •     ■  ( 

t  ,' 

I!  ! 


■it 


if^^r: 


m 


890 


ECONOMIC  HISTORY. 


18S0. 

notwocu  1840  and  18r)0  the  liinita  of  our  country  hnvo 
boon  I'urthur  extended  by  the  annexation  of  the  State  of 
Texas  and  of  territory  acipiired  from  Mexico  by  the  treaty  of 
(luadalupe  llidal^^o.  The  States  of  Iowa,  Wisconsin,  and 
Floi-ida  have  lieen  admitted  to  the  Union,  and  the  Terri- 
tories of  Alinncsofa,  Oref>;on,  and  New  Mexico  have  been 
created.  An  examination  of  the  maps  shows  that  the  fron- 
tier line  has  chau<;(Ml  very  little  during  this  decade.  At  the 
western  border  of  Arkansas  the  extension  of  settlement  is 
peremptDrily  limited  by  the  boundary  of  tiie  Indian  Terri- 
toi'y;  but  curiously  enough  also,  the  western  boundary  of 
Missouri  i>uts  almost  a  complete  stoj)  to  all  settlement,  not- 
withstanding that  some  of  the  most  densely  jtopulated  i)or- 
tions  of  the  State  lie  directly  on  that  boundary.  In  Iowa 
settlements  have  nuulc  sonu)  advance,  moving  up  the  Mis- 
souri, the  Des  Moines,  and  other  rivers.  The  settlements 
in  Miimesota  at  and  about  St.  Paul,  which  appeared  in  1840, 
arc  greatly  exteiuled  tip  and  down  the  Mississippi  River, 
while  other  scattering  bodies  of  population  ap])ear  in  north- 
ern Wisconsin.  In  the  southern  part  of  the  State  settlement 
has  made  considerable  advance,  especially  in  a  northeastern 
direction,  toAvards  Green  I3ay.  In  Michigan  the  change  has 
been  very  slight. 

Turning  to  the  southwest  we  find  Texas,  for  the  first  time 
on  the  map  of  the  United  States,  with  a  considerable  extent 
of  settlement;  in  general,  however,  it  is  very  s])arse,  most 
of  it  Iving  in  the  eastern  part  of  the  State,  and  being  largely 
dependent  upon  the  grazing  industry. 

The  included  unsettled  areas  now  are  very  small  and  few 
in  numl)er.  There  still  remains  one  in  southern  Missouri, 
in  the  hilly  country ;  a  small  one  in  nortlioastcrn  Arkansas,  in 
the  swampy  and  alluvial  region;  and  one  in  the  similar 
country  in  the  Yazoo  bottom-lands.  Along  the  coast  of 
Florida  are  found  two  jjatches  of  considerable  size,  which  are 
confined  to  the  swampy  coast  regions.  The  same  is  the  case 
along  the  coast  of  Louisiana.     The   sparse   settlements  of 


iWr 


umtry  have 
ic  State  of 
lie  treat}'  of 
M)nHin,   and 

the  Terri- 

liavc  been 
at  the  f  rou- 
te. At  the 
ttleincnt  ia 
(liau  Tcrri- 
jouiulary  of 
cmont,  not- 
j)ulate(l  i)or- 
'.  In  Iowa 
ip  the  Mis- 
settlements 
red  in  1«40, 
f\\)\n  River, 
ai*  in  nortli- 

settlement 
lortheastern 

ehangc  has 

le  first  time 

'.'title  extent 

larse,  most 

ing  largely 

all  and  few 
n  Missonri, 
rkansas,  in 
the  similar 
le  coast  of 
whieh  are 
is  the  case 
Icments  of 


■i 


INCREASE  OF  POPULATION. 


391 


Texas  arc  also  interspersed  witli  several  patches  devoid  of 
settk'ment.  In  southfrn  Georgia  the  hirgo  vacant  space 
heretofore  noted,  exteiuling  also  into  mtrthcrn  Florida,  luis 
entirely  disappeared,  and  thi!  Florida  settlements  Imve  al- 
ready reached  southward  to  a  eousideralile  distance  in  the 
peninsula,  being  now  free  to  extend  without  fear  of  hostile 
Seuiinoles,  the  greater  part  of  whom  have  bfjcn  removed  to 
the  Indian  Territory. 

The  frontier  line,  whieh  now  extends  around  a  eonsideral)lc 
part  of  Texas  and  issues  on  the  (Julf  coast  at  the  mouth  of  the 
Nueces  River,  is  4,500  miles  in  length.  The  aggregate  area  in- 
cluded Ity  it  is  1,005,213  square  miles,  from  which  deduction 
is  to  be  made  for  vacant  spaces,  in  all,  04,330  stpuire  miles. 
The  isolated  settlements  lying  outside  this  body  in  the  west- 
ern part  of  the  country  amount  to  4,775  square  miles. 

But  it  is  no  longer  by  a  line  drawn  around  from  the  St. 
Croix  River  to  the  Gulf  of  Mexico  that  we  embrace  all  the 
pojtulation  of  the  United  States,  excepting  only  a  few  outly- 
ing jiosts  and  small  settlements.  We  may  now,  from  the 
Pacific,  run  a  line  around  80,000  miners  and  adventurers, 
the  pioneers  of  more  than  one  State  of  the  Union  soon  to 
arise  on  that  coast  This  body  of  settlement  has  been 
formed,  in  the  main,  since  the  actpiisition  of  the  territory  by 
the  United  States,  and,  it  might  even  be  said,  within  the 
last  year  (1849-50),  dating  from  the  discovery  of  gold  in 
California.  These  settlements  may  be  comptited  rudely  at 
33,600  square  miles,  making  a  total  area  of  settlement  at 
that  date  of  979,249  square  miles,  the  aggregate  populatitm 
Itcing  23,191,870  and  the  average  density  of  settlement  23.7 
to  the  square  mile. 

1860. 

Between  1850  and  1860  the  territorial  changes  noted  are 
as  follows:  the  strip  of  Arizona  and  Xew  Mexico  south  of 
the  Gila  River  has  been  acquired  from  Mexico  by  the  Gads- 
den purchase  (1853);  Minnesota  Territory  has  been  admitted 
as  a  State;  Kansas  and  Nebraska  Territories  have  been 
formed  from  parts  of  Missouri  Territory;    California   and 


li 


lit 


!    II   ! 


392 


ECONOMIC  HISTORY. 


Oregon  have  been  admitted  as  States,  while,  in  the  unsettled 
parts  of  the  Cordillcran  region,  two  new  Territories  (Utah 
and  Washington)  have  been  formed  out  of  parts  of  that  terra 
incoynita  which  we  bought  from  France  as  a  part  of  Louisi- 
ana, and  of  that  which  we  acquired  by  conquest  from  Mexico. 
At  this  date  we  note  the  first  extension  of  settlements  beyond 
the  line  of  the  Missouri  River.  The  march  of  settlement  up 
the  slope  of  the  great  plains  has  begun.  In  Kansas  and  Ne- 
braska population  is  now  found  beyond  the  97th  meridian. 
Texas  has  filled  up  even  more  rapidly,  its  extreme  settle- 
ments reaching  to  the  100th  meridian,  while  the  gaps  noted 
at  the  date  of  the  last  census  have  all  been  filled  by  popula- 
tion. The  incipient  settlements  about  St.  Paul,  in  Minnesota, 
have  grown  like  Jonah's  gourd,  spreading  in  all  directions, 
and  forming  a  broad  band  of  union  with  the  main  body  of  set- 
tlement down  the  line  of  the  Mississippi  River.  In  Iowa  set- 
tlements have  crept  steadily  northwestward  along  the  course 
of  the  drainage,  until  the  State  is  nearly  covered.  Following 
up  the  Missouri,  population  has  reached  out  into  the  south- 
eastern corner  of  the  jjrosent  area  of  Dakota.  In  Wisconsin 
the  settlements  have  moved  at  least  one  degree  farther  north, 
while  in  the  lower  peninsula  of  Michigan  they  have  spread  up 
the  lake  shores,  nearly  encircling  it  on  the  side  next  Lake 
Michigan.  On  the  upper  peninsula  the  little  settlements 
which  appeared  in  1850  in  the  copper  region  on  Koewccnaw 
Point  have  extended  and  increased  greatly  in  density  as  that 
mining  interest  has  developed  in  value.  In  northern  New 
York  there  is  apparently  no  change  in  the  unsettled  area.  In 
northern  Maine  we  note,  for  the  first  time,  a  decided  move- 
ment towards  the  settlement  of  its  unoccupied  territory,  in 
the  extension  of  the  settlements  on  its  eastern  and  northern 
border  up  the  St.  John  River.  The  unsettled  regions  in  south- 
ern ^lissouri,  northeastern  Arkansas,  and  northwestern  Mis- 
sissipi)i  have  become  sparsely  covered  by  population.  Along 
the  Gulf  coast  there  is  little  or  no  change.  There  is  to  be 
noted  a  slight  extension  of  settlement  southward  in  the  pen- 
insula of  Florida. 

The   frontier  line  now  measures   5,300   miles,    and   em- 


INCREASE  OF  POPULATION. 


393 


braces  1,126,518  square  miles,  lying  between  latitude  28°  30' 
and  47°  30'  north,  and  between  longitude  67°  and  99°  30' 
west.  From  this  deduction  should  bo  made  on  account  of 
vacant  spaces,  amounting  to  39,139  square  miles,  found 
mainly  in  New  York  and  along  the  Gulf  coast.  The  outly- 
ing settlements  beyond  the  100th  meridian  are  now  numer- 
ous. They  include,  among  others,  a  strip  extending  far  up 
the  Rio  Grande  in  Texas,  embracing  7,475  square  miles  (a 
region  given  over  to  the  raising  of  sheep),  while  the  Pacific 
settlements,  now  com))rising  one  sovereign  State,  arc  nearly 
three  times  as  extensive  as  at  1850,  embracing  99,900 
square  miles.  The  total  area  of  settlement  in  1860  is  thus 
1,194,754  square  miles;  the  aggregate  population  is  now 
31,443,321,  and  the  average  density  of  settlement  26.3  to 
the  square  mile. 


1870. 

During  the  decade  from  1860  to  1870  a  number  of  territo- 
rial changes  have  been  effected  in  the  extreme  West.  Ari- 
zona, Colorado,  Dakota,  Idaho,  Montana,"  Nevada,  and 
Wyoming  have  been  organized  as  Territories.  Kansas, 
Nebraska,  and  Nevada  have  been  admitted  as  States.  West 
Virginia  has  been  cut  off  from  the  mother  Commonwealth 
and  made  a  separate  State. 

In  1870  we  note  a  gradual  and  steady  extension  of  the  fron- 
tier line  westward  over  the  great  plains.  The  unsettled  areas 
in  Maine,  New  York,  and  Florida  have  not  greatly  dimin- 
ished, but  in  Michigan  the  extension  of  the  lumber  interests 
northward  and  inward  from  the  Lake  shore  has  reduced  con- 
siderably the  unsettled  portion.  On  the  upper  peninsula 
the  settlements  have  increased  somewhat,  owing  to  the  dis- 
covery of  the  rich  iron  deposits  destined  to  play  so  imi)ortant 
a  part  in  the  manufacturing  industry  of  the  country. 

Settlement  has  spread  westward  to  the  boundary  of  the 
State  in  southern  Minnesota,  and  up  the  Big  Sioux  River  in 
southeastern  Dakota.  Iowa  is  entirely  reclaimed,  excepting 
a  small  area  of  perhaps  a  thousand  square  miles  in  its  north- 
western corner.     Through  Kansas  and  Nebraska  the  frontier 


li- 


;i' 


•r 


'\U 


394 


ECONOMIC  HISTORY. 


c ' 


It   mI: 


line  has  moved  steadily  westward,  following  in  general  the 
courses  of  the  larger  streams  and  of  the  newly  constructed 
railroads.  The  frontier  in  Texas  has  changed  but  little, 
that  little  consisting  of  a  general  westward  movement.  In 
the  Cordilleran  region  settlements  have  extended  but  slowly. 
Those  upon  the  Pacific  coast  show  little  change,  either  in 
extent  or  in  density.  In  short,  we  sec  everywhere  the 
effects  of  the  war  in  the  partial  stoppage  of  the  progress  of 
development. 

The  settlements  in  the  West,  beyond  the  frontier  line  have 
arranged  themselves  mainly  in  three  belts.  The  most  east- 
ern of  these  is  located  in  central  Colorado,  New  Mexico, 
and  Wyoming,  along  the  eastern  base  of  and  among  the 
Rocky  mountains.  To  this  region  settlement  was  first  at- 
tracted in  1859  and  1860  by  discovery  of  mineral  deposits, 
and  has  been  retained  by  the  richness  of  the  soil  and  by 
the  abundance  of  water  for  irrigation,  which  have  promoted 
the  agricultural  industry. 

The  second  belt  of  settlement  is  that  of  Utah,  settled  in 
1847  by  the  Mormons  fleeing  from  Illinois.  This  community 
then  differed,  and  still  differs,  radically  from  that  of  the 
Rocky  mountains,  being  essentially  agricultural,  mining 
having  been  discountenanced  from  the  first  by  the  church 
authorities,  as  tending  to  fill  the  *'  Promised  Land  "  with 
Gentile  adventurers,  and  thereby  imperil  Mormon  institu- 
tions. The  settlements  of  th's  group,  as  seen  on  the  map  for 
1870,  extend  from  southern  liabo  southward  through  cen- 
tral Utah,  and  along  the  eastern  base  of  the  Wahsatch  range 
into  northern  Arizona.  They  consist  mainly  of  scattered 
hamlets  and  small  towns,  about  which  are  grouped  the  farms 
of  the  communities. 

The  third  strip  is  that  in  the  Pacific  States  and  Territo- 
ries, extending  from  Washington  Territory  southward  to 
southern  California  and  eastward  to  the  system  of  "sinks," 
in  western  Nevada.  This  group  of  population  owes  its  ex- 
istence to  the  mining  industry,  the  moving  cause  in  nearly 
all  westward  migrations.  Originated  in  1849  by  a  "stam- 
pede "  the  like  of  which  the  world  had  never  before  seen,  it 


INCREASE  OF  POPULATION. 


395 


g  in  general  the 
ewly  constructed 
ngod  but  little, 

movement.  In 
iided  but  slowly, 
lange,  either  in 
everywhere   the 

the  progress  of 

>ntier  line  have 
The  most  east- 
^ew  Mexico, 
■nd  among  the 
t  was  first  at- 
leral  deposits, 
c  soil  and  by 
liave  promoted 

tah,  settled  in 
ia  community 
1  that  of  the 
ural,    mining 
'  the   church 
Land  "  with 
tnon  institu- 
thc  map  for 
hrough  cen- 
isatch  range 
of  scattered 
'd  the  farms 

nd  Territo- 
ithward  to 
:>f  "sinks," 
"'cs  its  ex- 
0  in  nearly 
a  "stam- 
re  seen,  it 


has  grown  by  successive  impulses  as  new  fields  for  rapid 
money-getting  have  been  de  veloped.  Latterly-,  however,  the 
value  of  this  region  to  the  agriculturist  has  been  recognized, 
and  the  character  of  the  occupations  of  the  people  is  under- 
going a  marked  change. 

These  three  great  Western  groups  comprise  nine  tenths  of 
the  population  west  of  the  frontier  line.  The  remainder  is 
scattered  about  in  the  valleys  and  the  mountains  of  Montana, 
Idaho,  and  Arizona,  at  military  posts,  isolated  mining 
camps,  and  on  cattle  ranches. 

The  frontier  line  in  1870  embraces  1,178,068  square 
miles,  all  between  27°  15'  and  47°  30'  north  latitude,  and 
between  67°  and  99°  45'  west  longitude.  From  this,  how- 
ever, deduction  is  to  be  made  of  37,739  square  miles,  on 
account  of  interior  spaces  containing  no  population.  To 
what  remains  we  must  add  11,810  square  miles  on  account 
of  settled  tracts  east  of  the  100th  meridian,  lying  outside  of 
the  frontier  line,  and  120,100  square  miles  on  account  of 
settlements  in  the  Cordilleran  region  and  on  the  PaciP.c 
coast,  making  the  total  area  of  settlement  for  1870  not  less 
than  1,272,239  square  miles,  the  aggregate  population  being 
38,558,371,  and  the  average  density  of  settlement  30.3  to 
the  square  mile. 

1880. 

In  tracing  the  history  of  the  settlement  of  our  country  we 
are  now  brought  down  to  the  latest  census,  that  of  1880. 
During  the  decade  just  passed  Colorado  has  been  added  to 
the  sisterhood  of  States.  The  first  point  that  strikes  us  in 
examining  the  map  showing  the  areas  of  settlement  at  this 
date,  as  compared  with  previous  ones,  is  the  great  extent  of 
territory  which  has  been  brought  under  occupation  during 
the  past  ten  years.  Not  only  has  settlement  spread  west- 
ward over  largo  areas  in  Dakota,  Nebraska,  Kansas,  and 
Texas,  thus  moving  the  frontier  line  of  the  main  body  of 
settlement  westward  many  scores  of  miles,  but  the  isolated 
settlements  of  the  Cordilleran  region  and  of  the  Pacific  coast 
show  enormous  accessions  of  occupied  territory. 


1^1 


'4 

.11 


■iil 


IV' 


¥ 
lit*, 


'.m 


I'h 


I    J 


f    ll- 


:l^;' 


396 


ECONOMIC  HISTORY. 


The  migration  of  farming  population  to  the  northeastern 
part  of  Maine  has  widened  the  settled  area  to  a  marked  ex- 
tent, probably  more  than  has  been  done  during  any  previous 
decade.  The  vacant  space  in  the  Adirondack  region  of 
northern  New  York  has  been  lessened  in  size,  and  its  limits 
reduced  practically  to  the  actual  mountain  tract.  The  most 
notable  change,  however,  in  New  England  and  the  ]\liddle 
States,  including  Ohio  and  Indiana,  has  been  the  increase 
in  density  of  population  and  the  migration  to  cities,  with 
the  consefjuent  increase  of  the  urban  population,  as  indicated 
by  the  number  and  the  size  of  the  spots  representing  these 
cities  upon  the  mapi  Throughout  the  Southern  States  there 
is  to  be  noted  not  only  a  general  increase  in  the  density  of 
population  and  a  decrease  of  unsettled  areas,  but  a  greater 
approach  to  uniformity  of  settlement  throughout  the  whole 
region.  The  unsettled  area  of  the  peninsula  of  Florida  has 
decreased  decidedly  while  the  vacant  spaces  heretofore  seen 
along  the  upper  coast  of  Florida  and  Louisiana  have  entirely 
disappeared.  Although  the  Appalachian  mountain  system  is 
still  distinctly  outlined  by  its  general  lighter  color  on  the 
map,  its  density  of  population  more  nearly  ai)proaohes  that 
of  the  country  on  the  east  and  on  the  west.  In  Slichigan 
there  is  seen  a  very  decided  increase  of  the  settled  region. 
Settlements  have  not  only  surrounded  the  head  of  the  lower 
peninsula,  but  they  leave  only  a  very  small  body  of  unsettled 
country  in  the  interior.  In  the  uj)per  i)eninsula  the  copper 
and  the  iron  interests,  and  the  railroads  which  subserve  them, 
have  peopled  quite  a  largo  extent  of  territory.  In  Wisconsin 
the  imsettled  area  is  rapidly  decreasing  as  railroads  stretch 
their  arms  out  over  the  vacant  tracts.  In  Mini.esota  and  in 
eastern  Dakota  the  building  of  railroads,  and  the  develop- 
ment of  the  latent  capabilities  of  this  region  in  the  cultiva- 
tion of  wheat,  have  caused  a  rapid  (low  of  settlement,  and 
now  the  frontier  line  of  population,  instead  of  returning  to 
Lake  Michigan,  as  it  did  ten  years  ago,  meets  the  boundary 
line  of  the  British  possessions  west  of  the  97th  moridiaii. 
The  settlements  in  Kansas  and  Nebraska  have  made  great 
strides  over  the  plains,  reaching  at  several  points  the  boun- 


INCREASE   OF  POPULATION. 


397 


1  iiioriuu.ii. 


tlaiy  of  the  humid  region,  so  that  their  westward  extension 
beyond  this  point  is  to  be  governed  hereafter  by  the  supply 
of  water  in  the  streams.  As  a  natural  result,  we  see  settle- 
ments following  those  streams  in  long  ribbons  of  population. 
In  Nebraska  these  narrow  belts  have  reaehed  the  western 
boundary  of  the  State  at  two  points:  one  upon  the  South 
Platte,  and  the  other  upon  the  Republican  River.  In  Kansas, 
too,  the  settlements  have  followed  the  Kansas  River  and  its 
branches  and  the  Arkansas  nearly  to  the  western  boundary 
of  the  State.  Texas  also  has  made  great  strides,  both  in  the 
extension  of  the  frontier  line  of  settlement  and  in  the  in- 
crease in  the  density  of  poi»ulation,  due  both  to  the  building 
of  railroads  and  to  the  development  of  the  cattle,  sheep,  and 
agricultural  interests.  The  heavy  population  in  the  prairie 
portions  of  the  State  is  explained  by  the  railroads  which  now 
traverse  them.  In  Dakota,  besides  the  agricultural  region 
in  the  eastern  part  of  the  Territory,  wo  note  the  formation 
of  a  body  of  settlement  in  the  Black  Hills,  in  the  southwest 
corner,  which,  in  1870,  was  a  part  of  the  reservation  of  the 
Sioux  Indians.  This  settlement  is  the  result  of  the  discov- 
ery of  valuable  gold  deposits.  In  Montana  there  appears  a 
great  extension  of  the  settled  area,  which,  as  it  is  mainly 
duo  to  agricultural  interests,  is  found  chiefly  along  the 
courses  of  the  streams.  Mining  has,  however,  played  not  a 
small  part  in  this  increase  in  settlement.  Idaho,  too,  shows 
a  decided  growth  from  the  same  causes.  The  small  settle- 
ments which,  in  1870,  were  located  about  Bolsd  City,  and 
near  the  mouth  of  the  Clearwater,  have  now  extended  their 
areas  to  many  hundreds  of  square  miles.  The  settlement  in 
the  southeastern  corner  of  the  Territory  is  almost  purely  of 
Mormons,  and  has  not  made  a  marked  increase. 

Of  all  the  States  and  Territories  of  the  Cordilleran  region 
Colorado  has  made  the  greatest  stride  during  the  decade. 
From  a  narrow  strip  of  settlement,  extending  along  the  im- 
mediate base  of  the  Rocky  ]\Iountains,  the  belt  has  increased 
so  that  it  comprises  the  whole  mountain  region,  besides  a 
great  extension  outward  upon  the  plains.  This  increase  is 
the  result  of  the  discovery  of  very  extensive  and  very  rich 


.    i;« 


■'II 


ii 


I.; 


li' 

-i 

^- 

:  i-iL,,- 

t; 

' 

,.  4,15 ,: 

^ 

§ 

■" . 

ip 

■':': 

••ii 

;  ■ : 

: ':  ].  i, 

:i 

i'-m! 

Il-i'f 


898 


ECONOMIC  HISTORY. 


i  * 


'•)  ', 


V.i 


\       I 


; .  . 


mineral  deposits  about  Leadville,  producing  a  "stampede" 
second  only  to  that  of  '49  and  '50  to  California.  Miners 
have  spread  over  the  whole  mountain  region  till  every  range 
and  ridge  swarms  with  them.  New  Mexico  shows  but  little 
change,  although  the  recent  extension  of  railroads  in  the 
Territory  and  the  opening  up  of  mineral  resources  will,  no 
doubt,  in  the  near  future,  add  largely  to  its  population. 
Arizona,  too,  although  its  extent  of  settlement  has  increased 
somewhat,  is  but  just  commencing  to  enjoy  a  period  of  rapid 
development,  owing  to  the  extension  of  railroads  and  to  the 
suppression  of  hostile  Indians.  Utah  presents  us  with  a 
case  dissimilar  to  any  other  of  the  Territories,  a  case  of 
steady,  regular  growth,  due  almost  entirely  to  its  agricul- 
tural capabilities,  as  was  noted  above.  This  is  duo  to  the 
policy  of  the  Mormon  Church,  which  has  steadily  discounte- 
nanced mining  and  speculation  in  all  forms,  and  has  encour- 
aged in  every  way  agricultural  pursuits.  Nevada  shows  a 
slight  extension  of  settlement,  due  mainly  to  the  gradual 
increase  in  the  agricultural  interest.  The  mining  industry 
is  probably  not  more  flourishing  at  present  in  this  State  than 
it  was  ten  years  ago,  and  the  population  dependent  upon  it 
is,  if  anything,  less  in  number.  In  California,  as  the  atten- 
tion of  the  people  has  become  devoted  more  and  more  to 
agricultural  pursuits,  at  the  expense  of  the  mining  and  cattle 
industries,  we  note  a  tendency  to  a  more  even  distribution 
of  the  inhabitants.  The  population  in  some  of  the  mining 
regions  has  decreased,  while  over  the  area  of  the  great  val- 
ley, and  in  the  fertile  valleys  of  the  Coast  ranges,  it  has 
increased.  In  Oregon  the  increase  has  been  mainly  in  the 
section  east  of  the  Cascade  range,  a  region  drained  by  the 
Des  Chutes  and  the  John  Day  rivers,  and  by  the  smaller 
tributaries  of  the  Snake,  — a  region  which,  with  the  cori'es- 
ponding  section  in  Washington  Territory,  is  now  coming  to 
the  front  as  a  wheat-producing  district.  In  most  of  the  set- 
tled portions  here  spoken  of  irrigation  is  not  necessary  for 
the  cultivation  of  crops,  and  consequently  the  possibilities  of 
the  region  in  the  direction  of  agricultural  development  are 
very  great.     In  Washington  Territory,  which  in  1870  had 


•i-ii 


ri 


INCREASE  OF  POPULATION. 


399 


been  scarcely  touched  by  immigration,  we  find  the  valley 
west  of  the  Cascade  Mountains  tolerably  well  settled  through- 
out, while  the  stream  of  settlement  has  poured  up  the 
Columbia  into  the  valleys  of  the  Walla  Walla  and  the  Snake 
rivers  and  the  great  plain  of  the  Columbia,  induced  thither 
by  the  facilities  for  raising  cattle  and  by  the  great  profits  of 
wheat  cultivation. 

The  length  of  the  frontier  line  in  1880  is  3,337  miles. 
The  area  included  between  the  frontier  line,  the  Atlantic 
and  the  Gulf  coast,  and  the  northern  boundary  is  1,398,945 
square  miles,  lying  between  26°  and  49°  north  latitude  and 
67°  and  102°  west  longitude.  From  this  must  be  deducted, 
for  unsettled  areas,  as  follows:  — 

Square  Miles. 

Maine 12,000 

New  York 2,200 

Michigan 10,200 

Wisconsin 10,200 

Minnesota 34,000 

Florida 20,800 

making  a  total  of  89,400  square  miles,  leaving  1,309,545 
square  miles. 

To  this  must  be  added  the  isolated  areas  of  settlement  in 
the  Cordilleran  region  and  the  extent  of  settlement  on  the 
Pacific  coast,  which  amount  in  the  aggregate  to  260,025 
square  miles,  making  a  total  settled  area  of  1,569,570  square 
miles.  The  population  is  50,155,783,  and  the  average  den- 
sity of  settlement  32  to  the  square  mile. 


i^M 


Wa 


M     • 


h     t 


400 


ECONOMIC  HISTORY. 


THE  FACTORY   SYSTEM. 

FuoM  Wright's  Repoht  on  tiiu  Factouv  System  of  toe  United 
States,  Tenth  Census,  Vol.  II.  pp.  537-511. 

At  the  time  of  the  agitation  of  their  independence  the 
desire  to  plant  the  mechanic  arts  in  this  country  became 
ahnost  a  passion,  —  certainly  a  feature  of  the  patriotism  of 
the  day.  Hon.  Edward  Everett,  in  an  address  on  American 
manufactures^  in  New  York,  in  1831,  stated:  — 

"Tlio  first  measuros  of  the  patriots  aimed  to  establish  their  in- 
dependence on  the  basis  of  tlie  productive  industry  and  laborious 
arts  of  the  country.  They  began  witli  a  non-importation  agree- 
ment nearly  two  years  before  the  Declaration  of  Independence. 
That  agreement,  .  .  .  with  the  exception  of  tlie  Address  to  the 
People  of  America  and  Great  Britain,  was  the  only  positive  act  of 
the  first  Congress." 

In  this  country,  as  well  as  in  England,  the  germ  of  the 
textile  factory  existed  in  the  fulling  and  carding  mills;  the 
former,  dating  earlier,  being  the  mills  for  finishing  the  coarse 
cloths  woven  by  hand  in  the  homes  of  our  ancestors ;  in  the 
latter,  the  cavding-mill,  the  wool  was  prepared  for  the  hand- 
wheel.  At  the  close  of  the  Revolution  the  domestic  system 
of  manufactures  prevailed  throughout  the  States. 

The  first  attempts  to  secure  the  spinning  machinery  which 
had  come  into  use  in  England  were  made  in  Philadelphia 
early  in  the  year  1775,  when  probably  the  first  spinning- 
jenny  ever  seen  in  America  was  exhibited  in  that  city.  Dur- 
ing the  war  the  manufacturers  of  Philadelphia  extended  their 
enterprises,  and  even  built  and  run  mills  which  writers  often 
call  factories,  but  they  can  hardly  be  classed  under  that  term. 
Similar  efforts,  all  preliminary  to  the  establishment  of  the 
factory  system,  were  made  in  Worcester,  Massachusetts,  in 
1780.  In  1781  the  British  Parliament,  determined  that  the 
textile  machinery  by  which  the  manufactures  of  England  were 


lii 


THE  FACTORY  SYSTEM. 


401 


)F  THE  United 
511. 

jpcndcnco  the 

uutry  became 

patriotism  of 

1  on  American 

ablisli  their  in- 
•y  and  laborious 
lortatiou  agrce- 
'  Iiulepeiulcnce. 
Address  to  the 
y  positive  act  of 

0  germ  of  the 
ing  mills ;  the 
ling  the  coarse 
icstors ;  in  the 
for  the  hand- 
nucstic  system 
ites. 

chincry  which 
Philadelphia 
irst  spinning- 
at  city.  Dur- 
cxtcndcd  their 
writers  often 
idcr  that  term, 
ishment  of  the 
ssachusetts,  in 
Tiined  that  the 
f  England  were 


being  rapidly  extended,  and  which  the  continental  producers 
were  anxious  to  secure,  should  not  be  used  by  the  people  of 
America,  re-enacted  and  enlarged  the  scope  of  the  statute  of 
1774  against  its  exportation.  By  21  George  111.,  c.  37,  it 
was  provided  thuL  any  person  who  packed  or  put  on  board, 
or  caused  to  be  brought  to  any  place  in  order  to  be  put  on 
any  vessel  for  exportation,  any  naachinc,  engine,  tool,  i)ress, 
l)a]ior,  utensil,  or  implement,  or  any  j)art  thereof,  which  now 
is  or  hereafter  may  be  used  in  the  woollen,  cotton,  linen,  or 
silk  manufacture  of  the  kingdom,  or  goods  wherein  wool, 
cotton,  linen,  or  silk  are  used,  or  any  model  or  plan  of  such 
machinery,  tool,  engine,  press,  utensil,  or  implement,  should 
forfeit  every  such  machine,  etc.,  and  all  goods  packed  there- 
with, and  c£200,  and  suffer  imprisonment  for  one  year.  In 
1782  a  law  was  enacted  which  prohibited,  under  penalty  of 
^oOO,  the  exportation  or  the  attempt  to  export  "blocks, 
plates,  engines,  tools,  or  utensils  used  in  or  which  are  proper 
for  the  preparing  or  finishing  of  the  calico,  cottim,  muslin,  or 
linen  printing  manufactures,  or  any  part  thereof."  The 
same  act  prohibited  the  transportation  of  tools  employed  in 
the  iron  and  steel  manufactures.  Acts  were  also  passed  in- 
terdicting the  emigration  of  artificers.  All  these  laws  were 
enforced  with  great  vigilance,  and  were  of  course  serious 
obstacles  to  the  institution  of  the  new  system  of  manufacture 
iu  America. 

The  manufacturers  of  this  country  were  thus  compelled 
either  to  smuggle  or  to  invent  their  machinerv.  Both 
methods  were  practised  until  most  of  the  secrets  of  the 
manufacture  of  common  goods  were  made  availalile  here. 

The  planting  of  the  mechanic  arts  in  this  country  became 
a  necessity  during  the  War  of  the  Revolution,  and  after- 
wards the  spirit  of  American  enter)  rise  demanded  that  New 
England  and  the  Middle  States  should  utilize  the  watcr- 
powcrs  which  they  possessed,  and  by  such  utilization  supply 
the  people  with  home  manufactures. 

When  the  people  of  the  States  saw  that  the  Treaty  of 
Paris  had  not  brought  industrial  independence,  a  new  form 
of  expression  of  patriotism  took  the  place  of  military  service; 

26 


ft    ' 
f  ■'  f 

y  1 

a:l 

Hi 

m 

ki 

1 

m 

P 

m:A 

?,i  ■ 

1     ■ 

.V;  ' 

.  li 

402 


ECONOMIC  HISTORY. 


».:i 


'.  1 


and  associations  were  formed,  the  object  of  which  wns  to 
discourage  the  use  of  British  goods ;  and  as  the  Articles  of 
Confederation  did  not  provide  for  the  regulation  of  com- 
merce, the  Legislatures  of  the  States  were  besought  to  pro- 
tect home  manufactures.  The  Constitution  of  1789  remedied 
the  defects  of  the  articles  in  this  rcsjiect,  and  gave  Ccjngress 
the  power  to  legislate  on  commercial  affairs.  The  Consti- 
tution was  really  the  outcome  of  the  industrial  necessities  of 
the  people,  because  it  was  on  account  of  the  difiiculties  and 
the  irritations  growing  out  of  the  various  commercial  regula- 
tions of  the  individual  States  that  a  convention  of  commis- 
sioners from  the  various  States  was  held  in  Annapolis  in  Sep- 
tember, 1786,  which  convention  recommended  the  one  that 
framed  the  new  or  present  Constitution  of  the  United  States. 

Of  course  those  industries  whose  products  were  called  for 
by  the  necessities  of  the  war  were  g.oatly  stimulated,  but  with 
peace  came  reaction  and  the  flooding  of  our  markets  with 
foreign  goods. 

The  second  act  under  the  Constitution  was  passed  July  4, 
1789,  with  this  preamble :  — 

"Whereas  it  is  necessary  for  the  support  of  the  government,  for 
the  discharge  of  the  debts  of  the  United  States,  and  for  tlie  encour- 
agement and  tlie  protection  of  manufactures,  tliat  duties  be  laid  on 
goods,  wares,  and  mercliandise  imported; 

" Be  it  e7iacted,  ate." 

Patriotism  and  statute  law  thus  paved  the  way  for  the 
importation  of  the  factory  system  of  industry,  and  so  its 
institution  here,  as  well  as  in  England,  was  the  result  of 
both  moral  and  economical  forces. 

As  early  as  1786,  before  the  adoption  of  the  Constitution 
of  the  United  States,  the  Legislature  of  Massachusetts 
offered  encouragement  for  the  introduction  of  machinery  for 
carding  and  spinning  by  granting  to  Robert  and  Alex- 
ander Barr  the  sum  of  £200  to  enable  them  to  complete  a 
roping-machine,  and  also  to  "construct  such  other  machines 
as  are  necessary  for  the  purpose  of  carding,  roping,  and 
spinning  of  sheep's  wool,  as  well  as  of  cotton  wool. "     The 


THE  FACTORY  SYSTEM. 


408 


ic  way  for  the 

ry,  and  so  its 

the  result  of 


next  year  these  parties  were  granted  six  tickets  in  a  land- 
lottery, —  otliers  engaj^ed  in  the  invention  and  construction 
of  cotton-spinning  niachinea  at  JJrldgewater,  lit'ing  associ- 
ated with  the  Harrs,  who  came  to  Massachusetts  from  Scot- 
land at  the  invitaticm  of  Hon.  Hugh  Orr,  of  nri<igewater, 
and  for  the  purpose  of  constructing  spinning-machines. 
There  is  no  doul)t  that  the  machinery  built  l)y  them  was  the 
first  in  this  country  which  included  the  Arkwright  devices ; 
the  first  factory,  however,  in  America  ex[)ressly  for  the 
manufacture  of  cotton  goods  was  erected  at  Beverly,  Massa- 
chusetts, in  1787.  This  enterprise  was  aided  by  the  Legis- 
lature. Tiio  factory  at  Beverly  was  built  of  brick,  was 
driven  by  horse-power,  and  was  continued  in  operation  for 
several  years,  but  its  career  as  a  cotton-mill  was  brief,  and 
no  great  success  attended  it.  About  the  same  time  other 
attempts  had  been  made  in  Rhode  Island,  New  York,  and 
Pennsylvania,  but  j)rincipally  in  Rhode  Island  and  that  part 
of  Massachusetts  contiguous  to  Rhode  Island. 

The  honor  of  the  introduction  of  power-8|)inning  machines 
in  this  country,  and  of  their  early  use  here,  is  shared  by 
these  last-named  States;  for  while  Massachusetts  claims  to 
have  made  the  first  experiments  in  embodying  the  principles 
of  Arkwright's  inventions  and  the  first  cotton  factory  in 
America,  Rhode  Island  claims  the  first  factory  in  which 
perfected  machinery,  made  after  the  English  models,  Avas 
practically  employed.  This  was  the  factory  built  by  Samuel 
Slater,  in  1790,  in  Pawtucket,  Rhode  Island,  which  still 
stands  in  the  rear  of  Mill  Street  in  that  city,  and  the  hum 
of  cotton  machinery  can  still  be  heard  within  its  walls. 
Previous  to  1790  the  common  jenny  and  stock-card  had  been 
in  operation  upon  a  small  scale  in  various  parts  of  the 
United  States,  but  principally  in  Pennsylvania,  New  York, 
Rhode  Island,  and  Massachusetts ;  but  every  endeavor  to  in- 
troduce the  system  of  spinning  known  as  water-frame  spin- 
ning, or  Arkwright's  method,  had  failed.  The  introduction 
of  this  system  was  the  work  of  Slater,  whom  President 
Jackson  designated  "the  father  of  American  manufactures." 
Samuel  Slater  was   born  in  Belper,    Derbyshire,   England, 


P 


!      — 


404 


ECONOMIC  IllSrORY. 


m 


June  0,  1708,  and  nt  fourteen  years  of  ago  was  bound  as  nn 
apprcnlico  to  Jedediah  Strutt,  Ks(i.,  a  manufacturer  of 
cotton  machinery  at  Milford,  near  Helper.  Strutt  was  for 
several  years  a  partner  of  Sir  Ilichard  Arlcwright  in  the 
cotton-spinning  l)usineH8;  so  young  Slater  had  every  oppor- 
tunity to  master  the  details  of  the  (jonstruction  of  tl»e  cotton 
machinery  then  in  us(!  in  England;  for  during  the  last  four 
or  (he  years  of  his  apprenticeship  he  served  as  general  over- 
seer, not  only  in  mailing  machinery,  hut  in  the  manufactur- 
ing department  of  Strutt's  factory.  Near  the  close  of  his 
term  his  attention  was  drawn  to  the  wants  of  the  States  by 
accidentally  seeing  a  notice  in  an  American  paper  of  the 
efforts  vaiious  States  were  making  l»y  way  of  offering 
bounties  to  parties  for  the  production  of  cotton  machinery. 
Slater  knew  well  that  under  the  laws  of  England  he  could 
carry  neither  machines  nor  mod(ds  or  jjlans  of  nuichines  out 
of  the  country;  so,  after  completing  his  full  time  with  Mr. 
Strutt,  he  Cimtinued  some  time  longer  with  him,  superin- 
tending some  new  works  Mr.  Strutt  was  erecting.  This  he 
did  that  he  might  so  perfect  his  knowledge  of  the  business 
in  every  department  that  he  could  construct  machinery  from 
memory  without  taking  plims,  models,  or  specifications. 
With  this  knowledge  Slater  embarked  at  London,  September 
13,  1789,  for  New  York,  Avhere  he  landed  November  17,  and 
at  once  sought  parties  interested  in  cotton  manufactures. 
Finding  the  works  of  the  New  York  Manufacturing  Com- 
pany, to  whom  he  was  introduced,  unsatisfactory,  he  corres- 
ponded with  jMessrs.  IJrown  <t  Almy,  of  Providence,  who 
owned  some  crude  spinning-machines,  some  of  which  came 
from  the  factory  at  Beverly,  ^Massachusetts.  In  January-, 
1790,  Slater  made  arrangements  with  IJrown  &  Almy  to 
construct  machinery  on  the  English  plan.  This  he  did  at 
Pawtucket,  making  the  machinery  principally  with  his  own 
liands,  and  on  the  20th  of  December,  1790,  he  started  three 
cards,  drawing  and  roving,  together  with  seventy-two  si)in- 
dles,  working  entirely  on  the  Arkwright  ))lan,  and  being  the 
first  of  the  kind  ever  operated  in  America. 

It  is  generally  supposed  that  the  course  of  the  progress  of 


'l[v. 


THE  FACTORY  SYSTE^^. 


406 


bounil  ns  nn 
luriicturer   of 
Initt  W118  for 
rij^ht  in  tho 
ovory  oppor- 
of  the  cotton 
;  the  last  four 
general  ovcr- 
L'  manvifaetur- 
close  of  Ills 
the  States  Ity 
paper  of  the 
y    of    olTering 
)U  maehinery. 
•  liuul  he  eouhl 
i  machines  out 
time  with  Mr. 
him,   superin- 
ting.     This  he 
of  the  husiness 
lachinory  h-om 
specifications. 
Ion,  September 
ember  17,  and 
manufactures, 
iieturing  Com- 
)ry,  he  corres- 
ovitlence,   who 
)f  which  came 
In    January, 
u   <t   Almy  to 
This  he  did  at 
with  his  own 
c  started  three 
enty-two  spin- 
and  being  the 

the  progress  of 


the  manufacture  of  cotton  goods  in  this  country  is  quite 
clearly  marked;  yet  a  careful  study  of  the  subject  seems 
rather  to  dissipato  the  line  of  advancement  instead  of  bring- 
ing it  into  clearer  view.  Dr.  Leander  IJishop,  in  his  exceed- 
ingly valuable  work,  "A  History  of  American  Manufactures," 
in  speaking  of  th(!  clothing  manufacturi!,  states  that  a,  corres- 
j)i)ndent  of  the  "American  Museum,"  writing  from  Charles- 
ton, South  Carolina,  in  July,  1790,  refers  to  a  gentleman 
who  "had  compl(;te(|  ;ind  liad  in  operation  on  the  High  Hills 
of  the  Santee  near  Statesburg,  giiuiing,  carding,  and  other 
machines  driven  by  water,  and  also  spinning-machines,  with 
eighty-four  Hi)indles  each,  with  every  necessary  article  for 
manufacturing  cotton.  If  this  information  be  correct,  tho 
attempt  to  manufacture  by  machinery  tho  cotton  which  they 
were  then  beginning  to  cultivate  extensively  was  nearly  as 
early  as  those  of  the  Northern  States." 

Certainly  this  bit  of  history  of  attempts  in  Southern 
States,  of  the  efforts  of  Samuel  Wetherell,  of  Philadelphia, 
of  the  Beverly  Company  in  Massachusetts,  of  Moses  ]}rown 
at  Providence,  11.  I.,  all  before  Slater's  coming,  to  introduce 
spinning  by  power,  illustrates  the  dilliculty  of  locating  tho 
origin  of  an  institution  when  a  country  of  such  projmrtions 
as  our  own  constitutes  the  field.  It  is  safe,  historically,  to 
start  with  Slater  as  the  first  to  erect  cotton  machinery  on  the 
English  plan,  and  to  give  the  factory  system  17!)0  as  its 
birthday. 

Tho  progress  of  tho  system  has  been  uninterrupted  from 
1790,  save  by  temporary  causes  and  for  brief  periods;  but 
these  interruptions  only  gav(>  an  increased  Impetus  to  its 
growth.  In  1792,  l)y  the  invention  of  the  cotton-gin,  an 
American,  Eli  Whitney,  of  Massachusetts,  residing  tempo- 
rarily in  Georgia,  contributed  as  much  toward  the  growth  of 
the  factory  system  as  England  had  contributed  by  the  splen- 
did series  of  inventions  which  made  the  cotton-manufacturing 
machinery  of  the  system. 

The  alarm  of  the  people  at  the  increase  in  the  demand  for 
foreign  goods  took  shape  again  in  1794  and  tho  decade  fol- 
lowing, and  by  patriotic  appeals  to  all  classes,  societies  and 
clubs  wore  formed  pledged  to  wear  only  home-made  goods. 


ECONOMIC  HISTORY. 


' 


i 


hi  I 

r 
If  i 


I: 


%k 


,m\ 


Congress  was  called  upon  to  restrict  importations.  The  re- 
sult of  all  these  efforts  and  influences  stimulated  the  manu- 
facture of  cotton  and  other  textiles.  The  water  privileges  of 
New  England  and  the  Middle  States  offered  to  enterprising 
men  the  inducement  to  build  factories  for  the  spinning  of 
yarn  for  the  household  manufacture  of  cloth.  At  the  close 
of  1809,  according  to  a  report  made  by  Mr.  Albert  Gallatin, 
Secretary  of  the  Treasury  in  1810,  eighty-seven  cotton  fac- 
tories had  been  erected  in  the  United  States,  which,  when  in 
operation,  would  employ  80,000  spindles. 

The  perfect  factory,  the  scientific  arrangement  of  parts  for 
the  successive  processes  necessary  for  the  manipulation  of  the 
raw  material  til!  it  came  out  finished  goods,  had  not  yet 
been  constructed  As  1  have  said,  the  power-loom  did  not 
come  into  use  in  England  till  about  1806,  while  in  this  coun- 
try it  was  not  used  at  all  till  after  the  war  of  1812.  In  Eng- 
land even  it  had  not  been  used  in  the  same  factory  with  the 
spinning-machines.  In  fact,  for  many  years  the  custom  of 
spinning  the  yarn  under  one  management  and  weaving  the 
cloth  under  another  has  prevailed  in  England. 

In  1811  Mr.  Francis  C.  Lowell,  of  Boston,  visited  England 
and  spent  much  time  in  insjiecting  cotton  factories,  for  the 
purpose  of  obtaining  all  possible  information  relative  to  cot- 
ton manufacture,  with  a  view  to  the  introduction  of  improved 
machinery  in  the  United  States.  The  power-loom  was  being 
introduced  in  Great  Britain  at  this  time,  but  its  construction 
was  kept  very  secret,  and  public  opinion  was  not  very  favor- 
able to  its  success.  Mr.  Lowell  learned  all  he  could  regard- 
ing the  new  machine,  and  determined  to  perfect  it  himself. 
He  returned  to  the  States  in  1814,  and  at  once  began  his 
experiments  on  Broad  Street,  Boston.  His  first  move  was 
to  secure  the  skill  of  Paul  Moody,  of  Amcsbury,  Mass.,  a 
well-known  mechanic.  By  and  through  the  encouragement 
of  Mr.  Nathan  Appleton,  a  company  had  been  organized  by 
Mv.  Lowell  and  Mr.  Patrick  T.  Jackson,  with  Mr.  Appleton 
as  one  of  its  directors,  for  the  establishment  of  a  cotton 
manufactory,  to  be  located  in  Waltham,  Mass.,  on  a  water 
privilege  they  had  purchased.  This  factory  was  completed 
in  the  autumn  of  1814,  and  in  it  was  placed  the  loom  per- 


THE  FACTORY  SYSTEM. 


407 


ns.  The  re- 
;d  the  manu- 
privileges  of 
enterprising 
I  spinning  of 
At  the  close 
)ert  Gallatin, 
a  cotton  fac- 
lich,  when  in 

tit  of  parts  for 
nilation  of  the 

had  not  yet 
•-loom  did  not 
3  in  this  coun- 
812.  In  Eng- 
ictory  with  the 

the  custom  of 
id  Aveaving  the 

Id. 
sited  England 
ctorics,  for  the 
relative  to  cot- 
on  of  improved 
oom  was  being 
ts  construction 
not  very  favor- 
c  could  rcgard- 
foct  it  himself. 
)ucc  began  his 
first  move  was 
bury,  Mass.,  a 
encouragement 
in  organized  by 
Mr.  Appleton 
nt  of  a  cotton 
ss.,  on  a  water 
was  completed 
I  the  loom  per- 


fected by  Mr.  Lowell,  which  differed  much  from  the  English 
looms.  Mr.  Lowell  had  neither  plans  nor  models  for  his 
factory  and  looms,  but  in  the  year  named  the  company  set 
up  a  full  set  of  machinery  for  weaving  and  spinning,  there 
being  1,700  spindles;  and  this  factory  at  Waltham  was  the 
first  in  the  world,  so  far  as  record  shows,  in  which  all  the 
processes  involved  in  the  manufacture  of  goods,  from  the  raw 
material  to  the  finished  product,  were  carried  on  in  one 
establishment  by  successive  steps,  mathematically  consid- 
ered, under  one  harmonious  system.  Mr.  Francis  C.  Lowell, 
aided  by  Mr.  Jackson,  is  unquestionably  entitled  to  the 
credit  of  arranging  this  admirable  system ;  and  it  is  remarka- 
ble how  few  changes  have  been  made  in  the  arrangements 
established  by  him  in  this  factory  at  Waltham. 

So  America  furnished  the  stone  which  completed  the  in- 
dustrial arch  of  the  factory  system  of  manufactures. 

The  growth  of  the  factory  system  [is  well]  illustrated  by 
the  cotton  manufacture.  After  the  success  of  the  power- 
loom,  the  cotton  manufacture  took  rapid  strides,  both  in 
Europe  and  America.  The  hand-loom  and  the  hand-weaver 
wore  rapidly  displaced.  Factories  sprung  up  on  all  the 
streams  of  Yorkshire  and  Lancashire,  in  England,  while  in 
this  country  the  activity  of  the  promoters  of  the  industry 
won  them  wealth,  and  won  cities  from  barren  pastures. 
They  erected  Lowell,  Lawrence,  Holyoke,  Fall  River,  and 
many  other  thriving  cities  and  towns,  and  now  in  this  gener- 
ation the  industry  is  taking  root  upon  the  banks  of  Southern 
streams.  The  progressive  steps  of  this  great  trade  are  shown 
by  the  tables  which  follow.  The  facts  for  Great  Britain  for 
the  year  1833  are  taken  from  Baines'  "History  of  Cotton 
Manufacture,"  and  have  been  corroborated  as  far  as  po8si1)le 
from  other  sources;  they  constitute  the  most  reliable  data 
obtainable  for  that  period.  For  1831,  for  the  United  States, 
we  have  the  census  returns  and  other  sources,  none  of  them 
very  accurate,  yet  they  give  the  best  ajtproximate  figures. 

It  will  be  observed  that  the  number  of  cotton  factories  in 
this  country  was  801  in  1831,  1,240  in  1840,  1,074  in  1850, 
and  that  since  1850  there  has  been  a  constant  decrease  in 
the  number  of  establishments.     This  is  the  result  of  consoli- 


rX 


r      0 


;:i\      f: 


408 


ECONOMIC  HISTORY. 


dation  and  the  establishment  of  large  works,  the  smaller 
factories  being  closed  or  united  with  the  large  ones.^  While 
the  number  of  factories  has  decreased,  the  consumi»tion  of 
cotton  and  the  production  of  goods  has  steadily  increased. 
Perhaps  the  best  gauge  for  the  progress  of  the  industry  is  to 
be  found  in  the  quantity  of  cotton  consumed  per  capita  of 
the  population.  In  Great  Britain,  in  1831,  the  home  con- 
sumption of  cotton  per  capita  (excluding  the  proportion  for 
the  export  trade)  was  6.02  pounds;  in  1881  it  was  7.75 
pounds;  in  the  United  States,  for  1830,  it  was  5.9  pounds; 
in  1880  it  was  13.91  pounds.  That  is,  the  clothing  of  the 
people  of  this  country  in  1830  required  5.9  pounds  of  cotton 
per  annum  and  now  it  requires  13.91  pounds. 

If  we  take  the  per  capita  consumption  of  the  factories, 
including  exports  and  home  consumption,  the  proportion  for 
Great  Britain  in  1831  was  16.15  pounds;  in  1881,  40.8 
pounds;  for  the  United  States,  in  1831,  it  was,  on  this  basis, 
0.1  pounds;  in  1880  it  had  risen  to  14.96  pounds.  The 
ratios  given  as  to  spindles  to  persons  employed,  capital  to 
spindles,  j)roduet  to  spindles,  capital  to  jtroduct,  product  to 
persons  employed,  while  in  some  sense  fallacious,  and  more 
valuable  to  the  expert  than  to  the  general  reader,  yet  arc 
true  for  the  time  given  and  the  existing  circumslances,  and 
certainly  show  the  change  of  circumstances.  The  ratio  of 
consumption  to  spindles  is  of  course  influenced  largely  by  the 
number  of  the  yarn  produced,  and  many  of  the  British  mills 
spin  finer  numbers  than  do  the  mills  of  this  country;  but 
whatever  may  be  the  cause,  the  ratio  stands  as  given,  and 
shows  that  the  attendant  circumstances,  either  of  machinery 
or  kind  of  product,  or  of  some  other  matter,  vary  as  to  the 
two  countries. 


M\ 


'  The  number  of  cotton  factories  for  1880  should  be  increased  by  the  num- 
ber of  mills  engaged  in  working  raw  cotton,  waste,  or  cotton  yarn  into  liosiery, 
webbing,  tiijH's,  fancy  fabrics,  or  mixed  goods,  or  other  fabrics  which  are  not 
sold  as  specific  manufactures  of  cotton  or  of  wool ;  some  of  these  work  both 
fibres,  but  belong  more  in  the  class  of  cotton  manufactures  than  in  any  other. 
Tliese  establishments,  240  in  all,  in  1880,  have  vithout  doubt  been  incluiled  in 
the  list  of  cotton-mills  heretofore ;  so  that  now  the  total  number,  to  correspond 
with  the  past,  should  be  1,005  cotton  factories  in  the  United  States  in  1880. 


,  the  smaller 
oncs.^  While 
jiisumption  of 
lily  increased. 

industry  is  to 

per  capita  of 
the  home  con- 
proportion  for 
1  it  was  7.75 
as  5.9  pounds; 
;lothing  of  the 
muds  of  cotton 
s. 

the  factories, 
))roportion  for 
in  1881,  40.8 
,  on  this  basis, 
pounds.  The 
yed,  capital  to 
ict,  product  to 
ious,  and  more 
fcader,  yet  are 
unstanoos,  and 
The  ratio  of 

larjiely  by  the 
British  mills 
country;  but 

as  given,  and 
of  machinery 

vary  as  to  the 


cased  by  the  nnni- 
yarn  into  hosiory, 
it's  which  art'  not 
if  these  work  both 
than  in  any  other, 
t  been  included  in 
hor,  to  correspond 
States  in  1880. 


ta 


H 

■< 
H 
m 

a 

M 
H 


fn 

a 

H 

ei 
n 

■< 
a 

o 

h 
o 

03 

B3 

g     1 
O    .. 

<  a 
to  3 

<  S 

S^ 

u 

H 

a 

H 

Bu 
O 

S5 

o 

.-I 

O 
S'. 
O 
O 

a] 
a 

H 


o 
a 

U 

.J 

ca 
-«) 

H 


O 


III 


?  2 


11 

§.2 

85 


11 


O    0) 

=  •5 


s 

c 

o 


r^B  FACTORY  SYSTEM. 


409 


to  -- 

i-t  CO 

CO  a^ 

I-  « 

S    8    !f  S 


S 


a 


S 


I-        M        t- 

US'" 


8    3 


s 

•c 


n 


i-T    o" 


Q      CO  -T! 

0_      OS  CO 

Scf  o" 

»-t  00 

1^       CO  d 

g  ^"  i 


^  ^  .-.  eo 

i.-a  I-  o  ^o 

.-  cc  3d  i- 

r-T  M 


00      ai5      CO 


ca 
n 

■<! 
H 

E 

o 
o 

H 

a 


g  3  -2  5  a.  =  £  3 


5^    S, 


1    ^    t2    9    S 

;£     CO     i-*     kO     CO 


|§o5-t-     " 


s. 


«  9 

o  o  o 


■SS 


m 


o-S 


5«  °< 


.2=1? 
■S  £  So. 


0 


•^       lO       o 

K       I-t       GO 
3       to       Q 


1    s 
5     '- 


^    S8 


O        CI 


s 
s 

3 


Sj     <m 


g 

'-' 

2 

2 

8 

8 

S 

r-4 

r^ 

i-t 

2 

2 

s  ^  s  a 

S    «■    S3    2 


fH  IH  rH  ,-« 

O  O  O  O 

ff>  M  CI  ?1 

CO  00  54  U5 


'^ 


a 

3 
•c 

pa 

§ 


a^       :o 


I 

■a 

p 


;t!-?i| 


sssss 


MMH 


■w 


410 


ECONOMIC  HISTORY. 


f 

sail 
11 


;i     *' 


n  *t 


m 


THE  COTTON  MANUFACTURES. 

Fkom  Atkinson's  Report  on  the  Cotton  Manufactures,  Tenth 
Census,  Vol.  II.  pp.  946-955. 

The  cotton  manufacture  of  the  United  States  may  be  now 
considered  more  firmly  established  than  ever  before.  The 
method  on  which  the  business  is  conducted  in  the  United 
States  varies  greatly  from  that  of  any  other  country;  and 
this  difference  arises  mainly  from  a  difference  not  only  in 
the  habits  and  customs  of  the  people,  but  also  in  their  con- 
dition and  intelligence. 

The  home  market  is  the  most  important  one,  and  may  long 
continue  to  be  so,  although  the  export  demand  for  our  fabrics 
now  takes  from  7  to  8  per  cent  of  our  annual  product,  and  is 
likely  to  increase. 

In  contrast  with  the  cotton  manufacturer  of  Great  Britain, 
our  principal  rival,  we  are  therefore  called  upon  to  meet  the 
demands  of  an  intelligent  class  of  customers,  living  under 
substantially  uniform  conditions,  and  varying  but  little  in 
their  requirements.  Hence  we  are  not  called  upon  for  the 
great  variety  of  fabrics  that  must  be  supplied  by  Great 
Britain.  In  consequence  of  this  demand  for  a  great  variety 
of  fabrics  the  work  of  the  cotton  manufacturer  of  England  is 
much  more  divided  than  with  us.  With  the  exception  of  a 
few  large  establishments,  working  mainly  to  sui)ply  the  home 
market,  few  goods  are  known  in  England  by  the  name  of  the 
factory  in  which  they  are  made,  nor  are  they  sold  under  the 
name  of  the  manufacturer;  but  to  a  very  large  extent  the 
yarn  is  spun  in  one  establishment,  woven  in  another,  and 
finished  in  a  third.  The  gray  cloth  is  sold  to  the  ware- 
houseman, or  to  the  merchant,  to  be  stamped  and  packed  by 
him,  or  to  be  dyed,  bleached,  or  printed  under  his  direction. 
If  English  goods  had  been  sold  under  the  name  and  stamp  of 
the  manufacturer,  as  cotton  goods  are  in  the  United  States, 


THE  COTTON  MANUFACTURES. 


411 


CTURES,  Tenth 


perhaps  the  substitution  of  clay  for  cotton  might  not  have 
been  carried  to  so  great  an  extent.  In  the  United  States 
cotton  goods  are  spun  and  woven  in  the  same  factory,  and 
whether  sold  in  the  gray  or  bleached,  they  are  almost  all 
stamped  and  marketed  under  the  name  of  the  factory  in 
which  they  are  made.  Each  factory,  therefore,  has  its  repu- 
tation to  sustain,  and  whether  the  fabric  be  coarse  or  fine 
it  is  the  effort  of  every  one  to  make  it  good  of  its  kind. 

The  same  rule  applies  to  printed  calicoes.  These  are 
marketed  under  the  name  of  the  works  in  which  they  have 
been  i)riuted,  and  the  reputation  and  permanent  existence  of 
these  works  rest  upon  uniformity  in  quality,  excellence  in 
color  and  style,  and  constant  progress  in  the  art  of  design. 

We  may  not  claim  to  be  more  honest  than  our  rivals, 
but  it  is  a  great  error  to  suppose  that  it  is  permanently  profit- 
able to  make  an  article  that  is  not  what  it  purports  to  be. 
A  cotton  fabric  may  be  of  a  low  grade,  and  may  be  intended 
to  sell  at  a  low  price,  but  yet  it  is  not  profitable  to  sul)stitute 
clay  for  cotton;  the  fabric,  whatever  it  is,  has  its  name  and 
reputation,  and  must  be  true  to  them,  or  else  the  demand  for 
it  will  sooner  or  later  cease.  Even  goods  that  are  made  for 
linings,  and  that  need  to  be  starched  and  stiffened  in  order 
to  be  used,  must  have  a  uniform  quality  in  the  fabric  itself 
to  hold  a  permanent  place  in  our  market.  Dyed  goods  that 
require  to  be  woven  on  heavily-sized  warps  cannot,  except  by 
rule,  be  loaded  with  sizing.  If  an  attempt  is  made  to  intro- 
duce an  article  in  which  clay  has  been  added  to  make  it 
heavier,  it  is  immediately  detected,  because  the  use  of 
sewing-machines  is  almost  universal,  and  the  clay  in  the 
fabric  heats  the  needle  and  exposes  the  fraud. 

In  stating  those  conditions  under  which  the  manufacture 
of  cotton  is  conducted  in  the  United  States  for  the  home  de- 
mand, it  is  not  intended  to  imply  that  the  use  of  a  foreign 
substance  to  give  additional  weight  to  a  cotton  fabric  is,  of 
necessity,  a  fraud.  For  instance,  there  is  a  very  large  de- 
mand in  China  for  materials  for  the  grave-clothes  of  corpses, 
and  for  this  use  "  earth  to  earth,  and  dust  to  dust "  may  bo 
considered  a  legitimate  rule,  even  if  the  earth  is  conveyed  in 


¥'-'\ 


412 


ECONOMIC  HISTORY. 


the  fabric  which  is  nominally  made  of  cotton.  Some  of  the 
finest  cotton  fabrics  yet  made  in  the  United  States,  which 
closely  resemble  silk,  are  used  mainly  for  lining  coflins. 

The  principal  market  for  our  own  fabrics  is  found  among 
the  thrifty  working-people,  who  constitute  the  great  mass  of 
our  population. 

It  has  therefore  happened  that,  although  we  have  not  until 
recently  undertaken  the  manufacture  of  very  fine  fabrics,  the 
average  quality  of  the  fabrics  that  we  do  make  is  better 
Ihan  that  of  any  other  nation,  with  the  possible  exception  of 
France.  It  is  for  the  wants  of  the  million  that  our  cotton 
factories  arc  mainly  worked,  and  we  have  ceased  to  import 
staple  goods,  and  shall  never  be  likely  to  resume  their  im- 
port. On  the  other  hand,  we  may  for  a  long  period  continue 
Ui  u'lporf  the  finer  goods  that  depend  mainly  on  fashion  and 
s'  •  '  .  their  use,  and  that  are  ]mrcly  articles  of  luxury. 
^i.,-}  ha,-,  been  stated,  the  substantial  fabrics  that  constitute 
the  main  part  of  our  cotton  manufacture,  and  that  are  used 
b_  iiic  masi?os  of  the  people,  are  of  the  best  of  their  kind, 
with  the  possible  reception  of  those  made  in  France.  The 
French  peasantry  are  a  sagacious  and  truly  economical  race, 
and  will  not  buy  a  poor  fabric  if  they  can  get  a  good  one; 
hence,  the  cotton  fabrics  for  their  use  are  of  a  very  substan- 
tial kind,  and  are  much  more  free  from  adulteration  than 
those  of  any  other  country  in  Europe.  The  common  cotton 
fabrics  of  England,  Belgium,  and  Germany  could  hardly  be 
sold  in  the  United  States  at  any  price. 

The  finest  printed  calicoes  of  France  and  England  may  be 
the  best  of  their  kind;  but  the  printed  calicoes  for  the  use 
of  the  multitude,  and  which  constitute  the  really  important 
branch  of  this  department  of  the  manufacture,  are  of  much 
better  quality  in  the  United  States  than  in  Europe,  and  are 
also  of  finer  colors  and  of  more  varied  styles. 

In  fact,  one  of  the  chief  obstacles  that  it  has  been  neces- 
sary to  overcome  in  the  introduction  of  unldeached  American 
cotton  fabrics  in  the  English  market,  and  in  other  markets 
heretofore  supplied  by  England,  has  been  their  apparently 
open  texture,  owing  to  the  absence  of  heavy  sizing.     In  the 


-^  ■.ninwiWialM 


.  -'f  -s 


THE   COTTON  "^MANUFACTURES. 


413 


ivc  not  imlil 


United  States  the  sizing  nsed  upon  the  warp,  and  which  is 
necessary  in  order  to  weave  it,  is  made  from  corn  or  potato 
starch,  free  from  any  substance  intending  to  malce  it  heavier. 
In  the  gray  cloth  the  sizing,  therefore,  constitutes  only  2^ 
to  5  per  cent  of  the  weight,  and  when  the  fabric  is  washed 
it  shrinks  more  in  measure  than  it  loses  in  weight;  hence  a 
square  yard  washed  and  dried  without  stretching  will  be 
heavier  than  a  sijuaro  yard  taken  directly  from  the  loom. 

In  England,  on  the  other  hand,  even  the  pure  sizing  is 
made  from  wheat  flour,  which  is  very  glutinous;  and  the 
fabrics  thus  woven,  even  where  no  adulteration  is  intended, 
lose  from  10  to  12  ))cr  cent  of  their  weight  on  the  first  wash- 
ing. These  pure  goods  are,  however,  made  chiefly  for  the 
home  consumption  of  the  richer  classes  of  England.  The 
greater  part  of  the  Engl  ish  cotton  fabrics,  exported  or  used 
by  the  working-classes,  arc  loaded  with  from  10  to  40  per 
cent  of  cl.ay  and  other  substances.  The  art  of  sizing  has 
been  highly  perfected  in  England,  and  has  been  made  the 
subject  of  very  numerous  patents;  and,  as  the  use  of  clay 
and  flour  to  the  extent  of  100  pounds  to  each  100  pounds  of 
cotton-warp  yarn  involves  great  danger  of  mildew,  many 
ingenious  chemical  applications  have  also  been  patented  to 
serve  as  antiseptics,  such  as  chloride  of  zinc,  chloride  of 
calcium,  comnu)n  salt,  white  vitriol,  etc.  These  various 
antiseptics  are  compounded  with  flour,  gypsum,  soapstone, 
china  clay,  and  other  heavy  sul)stances  in  various  ways. 
The  English  text-books  upon  the  art  of  sizing  are  iuhtructive 
nnd  suggestive,  especially  in  respect  to  the  rules  for  the  pur- 
chase of  the  most  glutinous  kinds  of  flour,  and  for  the 
detection  of  adulteration  in  flour,  it  being  ol)vious  that  un- 
less the  flour  is  pure  and  well  adapted  to  the  purpose,  it 
would  be  necessary  to  use  cotton  instead  of  clay  to  make  up 
the  weight  of  the  fal)ric. 

It  will,  of  course,  take  a  good  deal  of  time  to  accustom 
buyers  to  the  more  open  texture  of  cotton  fabrics  in  which 
no  clay  is  used;  but  as  time  passes  American  fabrics  are 
being  steadily  substituted  for  those  previously  used  by  for- 
eign nations,  especially  in  China. 


II 


5-'    I 


iH'ci 


m 


in  ', 


;- 1 


{" 


414 


ECONOMIC  HISTORY. 


Since  the  year  1860  the  cotton  manufacture  of  the  United 
States  has  been  exposed  to  greater  vicissitudes  than  any 
other  important  branch  of  the  national  industry,  and  the 
wonder  is,  not  that  there  should  have  been  some  disasters, 
but  that  it  should  have  survived  at  all  in  the  hands  of  its 
original  owners.  In  18G0  the  whole  number  of  8i)indle8  in 
the  United  States  was  5,235,000.  From  1857  to  18G0  the 
cost  of  constructing  a  spinning  and  weaving  factory  on  the 
medium  fabrics  woven  of  No.  25  yarn  was  from  |16  to  #20 
per  sjjindle  (the  number  designates  the  number  of  skeins  of 
840  yards  of  yarn  each  in  one  pound).  The  value  of  a  bale 
of  cotton  of  480  pounds  was  from  $40  to  f 50.  Then  came 
the  combined  effects  of  war,  paper  money,  and  scarcity  of 
cotton.  At  one  period  more  than  two  thirds  of  the  cotton 
machinery  of  the  United  States  was  stopped;  the  value  of 
a  bale  of  cotton  rose  to  over  'fOOO,  and  the  price  of  some 
kinds  of  goods  was  seven  to  eight  times  the  present  price. 
A  little  later  new  mills  were  constructed  which  cost  from 
-130  to  $40  per  spindle. 

At  the  date  of  the  census  the  number  of  spindles  operated 
in  the  specific  manufacture  of  cotton  fabrics  was  10,053,435; 
but  the  s])indle  has  changed  in  its  ))roductive  power,  and  each 
spindle  of  1880  was  much  more  effective  than  that  of  18G0. 
The  value  of  the  bale  of  cotton  was  again  from  $40  to  $50; 
the  standard  printing-cloth,  which  reached  33  cents  a  yard 
during  the  war,  was  worth  4  cents;  the  No.  25  mill  for 
spinning  and  weaving  could  be  built  for  from  $14  to  $18 
per  spindle;  our  export  of  cotton  fabrics  was  more  in  value 
and  much  more  in  quantity  than  in  1860,  and  the  only 
check  to  its  steady  and  profitable  increase  was  the  renewal 
of  the  home  demand.  Such  have  been  the  changes  and  fluc- 
tuati(ms;  yet,  despite  them  all,  not  one  spindle  in  ten  has 
passed  from  the  ownership  of  the  person,  firm,  or  corj)ora- 
tion  in  whose  possession  it  was  in  1860,  except  in  the  regu- 
lar process  of  bequest  or  voluntary  sale. 

During  the  period  of  inflation  or  of  great  vicissitude,  the 
attention  of  the  managers  of  the  property  was  of  necessity 
devoted  to  other  matters  than  the  improvements  and  minute 


&'\,\ 


I  f 


THE   COTTON  MANUFACTURES. 


415 


if  the  United 
lc8  than  any 
try,   and  the 
mc  disastcra, 
I  hands  of  its 
)f  spindles  in 
'  to  18G0  the 
actory  on  the 
.m  #16  to  #20 
r  of  skeins  of 
aluc  of  a  bale 
Then  came 
id  scarcity  of 
of  the  cotton 
the  value  of 
price  of  some 
present  price, 
ich  cost  from 

idles  operated 
s  10,053,435; 
wor,  and  each 

that  of  1800. 
m  #40  to  #50 ; 

cents  a  yard 

25  mill  for 
a  #14  to  #18 
more  in  value 
and  the  only 
s  the  renewal 
nges  and  fluc- 

c  in  ten  has 
11,  or  corpora- 
)t  in  the  rcgu- 


3 


cissitude,  the 
of  necessity 
ts  and  minute 


savings  in  which  the  profit  of  the  business  now  consists;  hut 
during  the  last  few  years  very  great  improvements  have  been 
made,  and  the  lesson  of  economy  and  saving  has  been 
learned.  The  best  example  that  can  be  cited  may  be  found 
in  the  record  of  one  great  factory  working  upon  coarse  and 
substantial  fabrics,  and  consuming  more  than  20,000  bales 
of  cotton  a  year.  Sixty  per  cent  of  its  products  are  sold  for 
export  to  various  parts  of  the  world.  The  proportion  of 
operatives  to  each  1,000  spindles  has  been  decreased  43  per 
cent,  or  from  26 J  to  15.  The  wages  of  women,  who  consti- 
tute more  than  two  thirds  of  the  operatives,  have  been  in- 
creased 33  per  cent.  The  cost  of  making  the  cloth,  aside 
from  the  material  used,  has  been  decreased  21  per  cent. 

In  1860  the  average  product  of  one  operative,  working 
one  year  was  5,317  pounds;  in  1880,  7,928  pounds  of  drill, 
such  as  is  exported  to  China.  Assuming  5  pounds,  or  about 
16  yards,  as  the  annual  requirement  of  a  Chinaman  for 
dress,  in  1860  one  Lowell  operative  working  one  year  clothed 
1,063  Chinese;  in  1880  one  could  sujiply  1,586.  It  will  be 
obvious  that  no  hand  spinning  and  weaving  can  compete 
with  this  product  of  machinery;  yet  the  machine-made 
fabrics  of  Europe  and  America  combined  have  as  yet  reached 
only  six  or  eight  in  a  hundred  of  the  Chinese.  How  soon,  the 
rest  will  be  clothed  in  cotton  fabrics  made  by  machinery  from 
American  cotton,  therefore,  depends  but  little  on  whether 
the  wages  of  the  Lowell  factory  girl  be  #4  or  #6  [)er  week, 
but  rather  on  what  exchangeable  products  the  Chinese  can 
produce  better  or  cheaper  than  we  can.  The  more  tea,  silk, 
sugar,  and  other  commodities  we  buy  from  them,  the  more 
cotton  fabrics  and  other  products  in  which  we  excel  will  they 
buy  from  us. 

It  has  been  held  that  the  cotton  of  America  must  Ije  more 
and  more  used  both  in  America  and  elsewhere,  and  that,  as 
time  goes  on,  almost  every  other  kind,  with  the  exception  of 
the  cotton  of  Egypt,  must  give  place  to  it.  To  Avhat  extent 
may  the  same  pre-eminence  be  secured  for  the  cotton  fabrics 
of  the  United  States  in  the  markets  of  the  world  that  we 
have  secured  in  respect  to  the  cotton  fibre  ? 


IK 
It 


r 


VJ  'ri 


M 


fl- ' 

1 

f       i 

1 

i   , 

I 

ffc'  '' 

n 

f   .  t  * 

UKfK'.ifi 

^Hunii 

11:: 

416 


ECONOMIC  HISTORY. 


In  the  consideration  of  this  brunch  of  the  subject,  our 
attention  nuist  be  given  to  the  present  condition  of  competi- 
tion between  the  mills  of  the  Middle  and  Eastern  States  with 
the  mills  of  Great  Britain. 

In  respect  to  the  Eastern  States  the  cotton  factories  of 
Lowell  in  Massachusetts,  Manchester  in  New  Ilanipshire,  JJid- 
dei'ord  and  Lewistun  in  Maine,  may  be  considered  in  their  re- 
lation to  the  factories  of  Manchester,  Stockport,  Preston,  and 
Bolton  in  Enj^land.  For  the  purposes  of  this  comparison  it 
may  be  assumed  that  there  can  be  no  permanent  advantaj^c  of 
one  set  of  mills  over  the  other  in  respect  to  the  (piality  and 
perfection  of  the  machinery.  At  any  pfiven  time  some  ad- 
vantage may  be  claimed  and  admitted  on  either  side  in  sorao 
special  department  of  the  mill;  but  every  invention  or  im- 
provement will  sooner  or  later  be  adopted  on  both  sides,  and 
the  supremacy  in  the  art  of  converting  cott(m  into  cloth  nnist 
ultimately  fall  to  that  country  or  section  which  ))ossesses  the 
advantage  in  resi)ect  to  the  conditions  ofl'ered  to  the  oper- 
atives,  and  in  j)roximity  to  the  source  of  the  raw  material. 

The  best  conditions  of  life  for  the  ojuM-atives,  and  the  best 
prospects  of  imi)roving  their  condition  and  that  of  their 
children,  are  of  the  gravest  importance.  The  factors  in  this 
problem  are  education,  shelter,  subsistence,  and  opportunity 
for  other  kinds  of  Avork.  In  respect  to  education,  the 
common-school  system  of  the  United  States  assures  a  thor- 
ough training  free  of  cost,  and  in  the  principal  towns  and 
cities  free  education  is  carried  to  the  point  of  preparing  the 
pupil  to  enter  a  university. 

In  respect  to  subsistence,  the  factories  of  New  England 
are  3,000  miles  nearer  the  wheat-fields  and  gra/ing-grounds 
of  the  West  than  those  of  Lancashire;  and  so  long  as  Europe 
buys  food  of  America  our  own  mills  must  have  the  advantage 
of  proximity  to  the  Western  prairies.  In  respect  to  the 
rents  of  dwelling-houses  there  cannot  long  be  any  difference, 
if  there  is  any  at  present,  because  the  materials  for  construc- 
tion are  most  abundant  in  America.  Ojiportunity  for  other 
work  than  that  of  the  factory  must  continue  for  many  gen- 
erations, and  until  this  continent  is  peopled. 


THE   COTTON  MANUFACTURES. 


417 


subject,  our 
1  of  compoti- 
1  States  with 

factories  of 
upshiiv,  Hid- 
1  ill  their  re- 
I'reston,  and 
oinparison  it 
advantage  of 
L^  (piality  and 
me  some  ad- 
side  in  some 
ention  or  im- 
th  sides,  and 
to  eh)th  must 
possesses  the 
to  the  oper- 
nv  niateriah 
and  the  best 
hat  t)f  their 
actors  in  this 
1  ojjportunity 
neat  ion,    the 
,suros  a  thor- 
al  towns  and 
)reparin}?  tlie 

sVw  England 
zinu-grounds 
ng  as  Europe 
he  advantage 
spect  to  the 
ly  difference, 
for  construc- 
lity  for  other 
or  many  gen- 


Tn  comparing  our  power  to  compete  willi  Eiighind  we  may 
chiim  advantages  of  one  kind,  and  in  comparing  witli  the 
nations  of  continental  Europe  we  may  claim  advantages  of 
another  kind,  in  some  res[(ccts  of  a  different  order.  In 
eompetition  with  England,  it  is  often  claimed  that  our  chief 
advantage  lies  in  a  certain  alleged  versatility  and  power  of 
adapting  nutans  to  ends,  and  in  great  (piickness  of  perception 
on  the  part  of  working-people  in  respect  to  the  advantages 
to  be  gained  by  the  adoption  of  new  processes  or  inventions, 
if  wc  have  this  advantage,  there  nniat  be  special  causes  for 
it  in  the  inlluences  that  are  brought  to  bear  upon  th(>  opera- 
tives and  artisans  who  do  the  work;  for  a  very  large  propor- 
tion of  them  are  foreign-born,  or  are  the  children  of  foreign 
immigrants.  Why  should  they  work  with  any  more  zeal  or 
judgment  here  than  in  the  countries  whence  they  have  come  ? 
Why  are  Irish  aiul  French-Canadian  factory  hands  to  be  re- 
lied on  for  more  steady  work,  larger  j)roduct,  lietter  disci- 
pline, and  more  cleanly  and  wholesome  conditiims  of  life 
than  the  operatives  of  England,  Belgium,  and  Germany  ? 
To  me  it  appears  evident  that  these  advantages,  so  far  as  they 
exist,  are  due  mainly  to  the  following  circumstances:  — 

Firfif.  Our  system  of  common  and  purely  secular  schools, 
attendetl  by  the  children  of  rich  and  poor  alike. 

Second.   Manhood  suffrage. 

T/iii'd.  The  easy  ac([uisition  of   land. 

Fourth.  The  habit  of  saving  small  sums  induced  by  the 
establishment  of  savings-banks  throughout  the  manufacturing 
States. 

Fifth.  The  absence  of  a  standing  army,  and  the  apjdica- 
ti(m  of  the  revenue  derived  from  taxes  on  the  whole  to  us(>ful 
jiurposes. 

In  respect  to  the  first  of  these  influences,  the  pul)lic-school 
system,  the  foreign  oliserver  generally  takes  notice  only  of 
the  quality  of  the  instruction  given,  and  though  he  may  find 
something  to  praise,  he  finds  also  much  to  blame.  He  finds 
ill  many  cases  the  instruction  bad  and  the  subjects  often  ill- 
chos(>n,  and  he  wonders  at  the  misdirection  of  a  force  that 
might  be  so  much  more  wisely  applied.     What  he  fails  to 

27 


418 


ECONOMIC  HI  STORY. 


\: 


M 


hi 


m' 


r.      t 


1    ■ 


I      I- 
I' 


I       I 


notice  is  that  the  school  itHolf,  entinjly  aimrt  from  its  instruc- 
tion, is  the  groat  ('(iucator  of  tho  childron  who  attend  it. 
The  school  is,  first  of  all,  no  respecter  of  persons;  the  stupid 
son  of  a  rich  man,  led  in  every  class  hy  the  son  of  a  me- 
chanic, cannot  in  after-life  look  down  on  him  as  an  inferior, 
whatever  tho  conventional  position  of  tho  two  may  lu!;  or,  if 
the  rich  man's  son  has  hrains  as  well  as  fortune,  th  ">r 
man's  son  can  never  attribute  to  fortune  only  the  lei  at 
ho  may  take  in  after-life.  The  school  is  thonnighly  demo- 
cratic, and  each  jmpil  learns  in  it  that  it  depends  on  himself 
alone  what  jjlace  he  may  take  in  after-life,  and  that,  al- 
though society  may  be  divided  into  pianos,  there  is  no 
system  of  caste  and  no  barrier  in  the  way  of  social  sucooss 
exeejjt  the  want  of  character  and  ability  tb  attain  it.  The 
associations  of  the  common  school  utterly  prevent  anything 
like  servility  in  the  relation  of  classes  in  after-life;  and 
although  it  is  sometimes  made  a  little  too  manifest  that 
"one  man  is  as  good  as  another,  and  a  little  better,"  on  the 
part  of  those  who  are  more  eager  than  discreet  in  their  effort 
to  rise,  yet  on  the  whole  the  relation  of  tho  various  classes, 
which  must  in  the  nature  of  things  always  and  over-  ore 
exist,  is  that  of  mutual  respect,  and  anything  like  1- 

world  distinctions  of  caste  and  rank  would  seem  aboui  as 
absurd  to  one  as  to  tho  other.  The  common  school  is  the 
solvent  of  race,  creed,  nationality,  and  condition. 

In  another  way  the  discipline  of  the  school  affects  the  pro- 
cesses of  manufacture.  In  the  schools,  cleanliness,  order, 
and  regular  habits  are  enforced,  with  deference  to  the 
teachers  and  respect  for  authority;  and  in  these  later  years, 
this  is  coupled  with  the  teaching  of  music  and  drawing  in 
all  the  principal  towns  and  cities.  When  children  thus 
trained  are  removed  to  the  mill  or  the  workshop,  habits  of 
order  and  cleanliness,  with  some  ajsthetio  taste,  are  already 
established.  Nothing  strikes  an  American  manufacturer 
with  so  much  surprise,  as  the  extreme  untidiness  of  the 
large  textile  mills  of  England  and  the  dreariness  of  the  fac- 
tory towns.  In  this  respect,  however,  it  must  be  confessed 
that  the  managers  of  the  New  England  mills  are  greatly 


11  I 


THE   COTTON  MAXUFACTUIIES. 


419 


iiidcil  by  tho  absence  of  smoke,  the  coal  commonly  used 
being  antliracito.  Much  surprise  is  often  expressed  by  our 
foreign  visitors,  at  the  amount  of  decoration  permitted  in 
tlie  fitting  of  stationary  and  locomotive  engines  and  in  nnieh 
of  our  machinery;  but,  bad  as  the  taste  displayed  may  some- 
times be,  it  is  nevertheless  a  fact  that  such  engines  or 
macdiines  arc  better  cared  for  and  kej)t  in  better  repair  than 
where  no  individuality,  so  to  speak,  is  permitted.  On  one 
of  our  great  railways  the  attempt  was  not  long  since  made 
to  dispatch  the  locomotives  as  they  hapjjened  to  arrive  at  the 
central  station,  sometimes  with  one  and  sometimes  with  an- 
other engine-driver;  but  the  immediate  and  great  increase 
in  tlu!  repair  account  caused  tho  corporation  to  return  very 
soon  to  the  customary  plan  of  giving  each  driver  a  particu- 
lar locomotive,  with  which  he  may  be  identified. 

Tho  Instruction  of  tho  school  also  gives  every  pupil  a 
superficial  knowledge,  if  no  more,  of  the  geography  and  re- 
sources of  tho  country,  which  the  universal  habit  of  reading 
newspapers  keeps  up.  Hence  comes  fb'  almost  entire  ab- 
sence of  anv  fixed  character  in  the  labor  of  the  country; 
every  boy  believes  that  he  can  achieve  success  somewhere 
else,  if  not  at  home.  No  congestion  of  labor  can  last  long. 
The  war  and  the  succeeding  railway  mania  combined  con- 
centrated population  at  certain  ))uints  to  a  greater  extent 
than  ever  happened  before,  and  it  has  taken  more  than  five 
years  to  overcome  the  difficulty;  but  within  these  five  years 
a  million  or  more  new  inhabitants  in  Texas,  half  a  million 
or  more  in  Kansas,  and  probably  tw^o  or  three  millions 
added  to  the  population  of  Nebraska,  Colorado,  Minnesota, 
and  the  far  Northwest,  indicate  that  the  evil  has  already 
found  a  remedy. 

It  is  already  apparent  that  a  very  slight  increase  in  the 
demand  for  skilled  woi-kmen  in  certain  branches  of  employ- 
ment would  not  easily  be  m(>t  in  tlie  Eastern  States  except 
by  drawing  upon  England  and  Germany.  During  the  years 
of  depression,  the  cessation  of  railway  building  and  the  use 
of  the  excess  of  railway  plant  existing  in  1873  has  caused 
the  dispersion  of  a  large  portion  of  the  trained  mechanics 


420 


ECONOMIC  HISTORY. 


PI 


I  Si-; 

I 


K 


I 


i|i. 


aiul  artisans  who  then  did  the  work  of  supplying  this  de- 
mand ;  but  these  are  not  the  men  who  have  crowded  the  East- 
ei'u  cities  and  eaused  the  api)arent  excess  of  Uiborers  out  of 
work.  Such  men  have  gone  back  to  the  land,  or  in  the  new 
States  and  Territories  have  found  other  ways  in  wliich  (o 
apply  their  sldll  and  energy,  and  they  will  not  return.  It 
may  be  that  the  greatest  danger  to  the  manufacturers  of 
Kughmd  will  not  1)C  in  our  competition  in  the  sale  of  goods 
in  neutral  markets,  l)ut  in  our  competition  for  the  skilled 
workmen  and  artisans  who  make  these  goods,  when  we  offer 
tliem  eijual  or  higher  wages  and  better  comlitions  of  life  in 
the  work  that  will  very  soon  need  to  l)e  done  to  supply  the 
increasing  demand  in  our  own  country. 

The  patent  system  may  here  be  cited  also  as  a  factor  in 
our  industrial  system.  It  has  been  carried  to  an  almost  ab- 
surd extreme,  so  that  it  is  not  safe  for  any  one  to  adopt  a 
new  method,  machine,  or  j)art  of  a  machine,  and  attempt  to 
use  it  quietly  and  without  taking  out  a  paient,  lest  some  sharp 
person,  seeing  it  in  use  and  not  ))ublished,  shall  himself 
secure  a  patent  and  come  back  to  the  real  inventor  with  a 
claim  for  royalty. 

Manhood  suffrage,  subject  as  it  is  to  gi'cat  abuses,  and 
didicult  as  it  has  made  the  problem  of  the  self-government  of 
great  cities,  where  voters  do  not  meet  each  other,  as  in  the 
town-meeting,  face  to  face,  l>ut  where  the  powers  of  govern- 
ment are  of  necessity  delegated  to  men  of  whom  the  voters 
can  have  little  personal  knowledge,  yet  works  distinctly  in 
the  direction  of  the  safety,  stai)ility,  and  order  of  the  com- 
munity. Outside  of  two  or  three  of  the  very  largest  cities, 
where  there  are  concentrated  great  masses  of  illiterate  citi- 
zens, it  would  be  dillicult  to  find  a  case  of  serious  abuse  of 
till'  power  of  taxation  except  in  the  South  since  the  war,  and 
ev.Mi  there  the  evil  is  now  mainly  abated. 

The  easy  ac(piisition  of  land  throughout  the  country  under 
simple  forms  of  conveyance,  registered  in  every  county,  gives 
a  motive  to  economy,  and  induces  habits  of  saving  that  are 
of  supreme  importance  in  their  ellVct  on  society.  In  the 
town  in  which  I  live,  —  and  in  wliich  I  can  remember  the 


THE   COTTON  MANUFACTURES. 


421 


ing  this  ilo- 
dcd  the  East- 
borors  out  of 
31'  hi  the  new 

in  which  Id 
,t  return.  It 
ufactiircrs  of 

sale  of  goods 
)!•  the  sldUed 
wlien  wc  offer 
ions  of  life  in 
to  sui)i»ly  the 

as  a  factor  iu 
an  almost  ah- 
uue  to  adopt  a 
md  attempt  to 
I'st  some  sharp 
shall  himself 
nventor  with  a 

at  abuses,  and 
■overument  of 
ther,  as  in  the 
crs  of  govcrn- 
lom  the  voters 
s  distinctly  in 
cr  of  the;  corn- 
largest  cities, 
illiterate  citi- 
rious  abusi!  of 
c  the  war,  and 

?  country  imder 

ry  county,  gives 

saving  that  are 

ociety.     In  the 

remember  the 


CDming  of  the  first  Irishman  who  became  a  land-owner, —  out 
of  about  one  thousand  owners  of  real  estate,  over  two  hun- 
dred are  of  Irish  birth  or  extraction.  The  richest  one  among 
them  came  from  Ireland  in  184G,  a  steerage  jtassenger.  lie 
now  i)ay8  taxes  on  ])roperty  of  the  value  of  •'r'5U,0U0,  almost 
all  in  real  estate.  His  son  is  superintendent  of  the  rej)airs 
of  highways,  and  is  one  of  the  most  elHcient  members  of  the 
school  committee. 

During  the  last  thirty  years  the  factory  population  of  New 
England  has  ])assed  through  three  phases.  First  came  the 
s(»ns  and  daugliters  of  the  New  England  farmer;  but  as  the 
sewing-machine  and  other  inventions  opened  new  demands 
for  women's  work,  women  of  American  lurth  passed  out  to 
easier  or  better-paid  employment,  while  the  men  took  up 
other  branches  requiring  more  individual  skill.  These 
})laces  were  taken  mainly  by  Irish,  with  a  few  Germans  anu 
English.  But  as  the  Irish  saved  their  earnings,  and  as  the 
New  England  yeomen  emigrated  to  the  richer  lands  of  the 
great  West,  they  ]»assed  out  of  the  mills  to  buy  up  the  de- 
serted farms  of  the  ))0(u-cr  Northeastern  .States,  wliero,  by 
their  persistent  industry  and  manual  labor,  they  aehieve(l 
success,  and  gained  a  position  which  satisfied  them,  l)ut 
with  which  the  native  New  Englander  is  no  longer  contented. 
Their  places  in  the  mills  are  now  being  more  and  more  taken 
l»y  the  French  Canadians,  who,  in  their  new  conditions  and 
surroundings,  show  little  of  the  stolid  and  uu])rogrossive 
character  which  has  kcjit  them  so  long  contented  on  their 
little  strips  of  land  on  the  Saint  Lawrence  River.  In  the 
very  air  they  breathe  they  seem  to  imliibe  a  new  and  restless 
energy,  while  the  intelligence  shown  by  their  children  in 
the  schools  augurs  Avell  for  their  future  progress.  On  the 
whole  the  simplicity  of  our  system  of  land  tenure,  and  the 
ease  with  which  small  parcels  may  be  ol)tained,  nuist  be 
rated  among  the  most  important  factors  in  considering  our 
jiossible  advantage  over  other  countries. 

Next  in  our  list  comes  the  savings-liank.  In  IST"),  out  of 
the  1,052,000  inhabitants  of  Massachusetts,  720,000  were 
depositors  in  savings-banks  to  the  amount  of  !^238,000,000. 


yi 


irt 


siV 


F 


h: 


I 

1 

..    I         \. 

f 

f 

I 

i 

^Ss 


$1 


un 


w 


u 


422 


ECONOMIC  HISTORY. 


During  the  late  years  of  depression  the  deposit  has  decreased 
somewhat  in  amount,  but  the  decrease  has  been  chiefly  owint^ 
to  the  withdrawal  of  money  for  other  investment,  especially 
in  United  States  bonds.  There  have  been  some  failures  of 
banks  and  some  losses,  as  might  well  have  been  ex))ected, 
but  they  have  been  less  than  in  any  other  branch  of  business ; 
and  the  savings-bank  system  stands  firmly  based  on  well- 
earned  confidence,  and  offers  an  easy  means  of  saving  the 
smallest  sums  to  every  man,  woman,  and  child  in  the  State. 
At  the  present  time  the  deposits  in  the  savings-banks  of 
Massachusetts  amount  to  about  !fti240,000,000,  owned  by 
about  750,000  persons. 

To  these  causes  of  quick  adaptation  to  any  conditions  that 
may  arise,  or  to  any  necessity  for  the  application  of  new 
methods  or  devices,  may  be  added  the  custom,  which  has 
almost  the  force  of  law,  of  an  equal  distributi(m  of  estates 
among  the  children  of  the  testator,  l^ools  to  him  who  can 
use  them  is  the  unwritten  law;  and  neither  land  nor  capital 
can  remain  long  in  the  j)ossession  of  him  who  cannot  direct 
or  use  them  wisely.  Liberty  to  distribute  is  esteemed  as 
important  a  factor  in  our  Itody-politic  as  liberty  to  accumu- 
late, even  though  the  libiM-ty  may  sometimes  lead  to  the 
apparent  waste  of  great  fortunes. 

Finally,  it  must  be  held  that  our  freedcmi  from  the  blood- 
tax  of  a  standing  army,  and  the  fact  that  the  proceeds  of 
taxation  are,  on  the  whole,  usefully  and  ])roductively  ex- 
pended, arc  among  our  greatest  advantages ;  and  this  is 
asserted  with  conlidence,  notwithstanding  the  misgovern- 
ment  of  some  great  cities  and  of  several  of  the  Southern 
States.  What  arc  these  failures  but  proofs  of  the  general 
•  'onlidence  of  the  people  in  local  self-government?  Great 
frauds  and  great  abuses  can  only  hap})en  where  integrity  is 
the  common  rule;  and  where  each  nian  distrusts  his  neigh- 
bor, or  each  town,  city,  or  State,  distrusts  the  next,  the 
opportunity  for  fraud  or  breach  of  trust  cannot  occur.  The 
use  of  inconvertible  paper  money  during  many  years  has  not 
been  without  its  necessary  malign  result  npcm  the  character 
of  the  people,  and  the  newspapers  arc  filled  with  the  fraud 


^??1r 


THE  COTTON  MANUFACTURES. 


423 


i  lead  to  the 


and  corrnption  that  have  come  to  light;  but  no  newspaper 
has  ever  yet  recorded  one  fact  that  offsets  many  frauds.  In 
the  great  Boston  fire,  one  of  the  Boston  banks  lost  not  only 
every  book  of  account  but  every  security  and  note  that  was 
in  its  vaults,  amounting  to  over  11,250,000.  On  the  morn- 
ing after  the  fire  its  officers  had  no  evidence  or  record  by 
which  any  of  the  persons  or  corporators  who  owed  it  money 
could  be  held  to  their  contracts;  yet  within  a  very  short 
time,  duplicate  notes  were  voluntarily  brought  in  by  its 
debtors,  many  of  whom  knew  not  whether  they  could  ever 
pay  them  because  the  fire  had  destroyed  their  own  property, 
and  the  known  ultimate  loss  of  that  bank  from  the  burning 
of  its  books  and  securities  was  less  than  'j!lO,000. 

Our  army  is  but  a  border  police.  Although  its  officers  are 
held  in  honor  and  esteem,  military  life  is  not  a  career  that 
very  many  seek,  and  as  time  goes  on  it  will  become  an  occu- 
l)ation  less  and  less  to  be  desired.  Thus  we  arc  spared  not 
only  tl  tax  for  its  support,  but  the  worse  tax  of  the  with- 
drawal of  its  members  from  useful  and  productive  pursuits. 
It  is  in  this  respect  that  we  claim  our  greatest  advantage 
over  the  nations  of  continental  Europe.  What  have  we  to 
fear  from  the  competition  of  Germany  if  we  really  luidcrtakc 
to  beat  her  in  the  neutral  markets,  which  we  can  reach  as 
readily  as  she  can  ?  For  a  little  while,  the  better  instruction 
of  the  merchants  in  her  technical  and  commercial  schools 
may  give  her  advantage  ;  but  that  can  be  overcome  in  a  single 
generation,  or  as  soon  as  the  need  is  felt  with  us,  as  it  is 
now  l)eginning  to  be  felt.  After  we  shall  have  su])plicd  our 
present  want  of  technical  educaticm,  the  mere  diff'erence  be- 
tween the  i)rcsence  of  a  great  army  on  her  soil  and  its  neces- 
sary support,  and  the  absence  of  such  a  tax  cm  us,  will 
constitute  the  difference  on  which  modern  commerce  turns. 
Wlien  traffic  of  the  world  turns  on  half  a  cent  a  yard,  a  cent 
a  bushel,  or  a  half-penny  a  ])ound  cm  the  great  staples,  no 
nation  can  long  succeed  in  holding  a  traffic  that  is  handi- 
capped with  a  standing  army.  The  ]»rotection  of  Germany 
from  our  competition  in  neutral  markets  may  be  offset  in 
our  yet  more  dangerous  competition  for  men.     The  German 


If. 


II. i  ■ . 


i-     h 


1^ 


M 


424 


ECONOMIC  HISTORY. 


already  knows  Texas,  and  in  the  one  l)lock  of  60,000  square 
miles  of  land  by  which  the  State  of  Texas  exceeds  the  area 
of  the  German  empire,  we  offer  room  and  healthy  conditions 
of  life  for  millions  of  immigrants;  and  if  they  come  in  sutti- 
cient  numbers,  they  can  raise  on  that  single  square  of  land 
as  much  cotton  as  is  now  raised  in  the  whole  South,  that  is 
to  say,  5,000,000  bales;  and  as  much  wheat  as  is  now  raised 
in  the  whole  North,  that  is  to  say,  400,000,000  buslu'ls,  and 
yet  subsist  themselves  beside  on  what  is  left  of  this  little 
patch  that  will  not  be  needed  for  these  two  crops. 

It  will  be  obvious  that  even  the  least  imaginative  cannot 
but  be  moved  l)y  the  intiuences  that  have  been  designated, 
and  that  versatility  and  readiness  to  adopt  every  laltor-saving 
device  will  not  only  be  i)roniotcd,  but  will  be  aI)Solutcly 
forced  into  action,  when  such  vast  areas  arc  to  be  occupied, 
and  when  even  the  dullest  boy  is  educated  in  the  belief  that 
he  also  is  to  be  one  of  those  who  are  to  build  uj)  this  nation 
to  the  full  measure  of  its  high  calling.  We  may  not  dare 
to  l)oast,  in  view  of  all  we  have  passed  through ;  but  we  know 
that  slavery  has  been  destroyed,  and  that  the  nation  lives 
stronger,  truer,  and  more  vigorous  than  ever  before.  We 
know  that  it  has  Iteen  reserved  for  a  democratic  re])iiblic  to 
be  the  first  among  nations  that,  having  issued  govci'nuicnt 
notes  and  made  them  a  legal  tender,  has  resumed  jjayment 
in  coin  without  repudiation  or  reduction  of  the  promise. 
We  know  that  wo  have  }»aid  nearly  a  half  of  our  great  na- 
tional debt  already,  and  that  the  rest  is  now  mainly  held  l)y 
our  own  citizens.  We  believe  that  within  the  lives  of  men 
of  middle  age  now  living,  the  nation  will  number  one  hun- 
dred millions,  and  that,  in  whatever  else  we  may  be  found 
wanting,  we  cannot  long  be  kept  back  in  our  career  of  mate- 
rial prosp(>rity,  which  shall  be  shared  with  absolute  certiiinty 
by  every  one  who  brings  to  the  work  health,  integrity,  and 
energy. 

If  there  is  any  force  in  this  reasoning,  our  competition 
with  other  manufacturing  couutries,  in  the  supplying  of  neu- 
tral mark(!ts  with  manufactured  goods,  will  not  be  compassed 
by  the  low  rates  of  wages  paid  to  our  factory  operatives  or  to 


?.rv  ^ 


THE   COTTON  MANUFACTURES. 


425 


the  working-people  engaged  in  our  metal  works  and  other 
occupations,  but  first  by  obtaining  and  keeping  such  an  ad- 
vanced ]»()sition  in  the  application  and  use  of  improved  tools 
and  machinery  as  shall  make  high  wages  consistent  with  a 
low  cost  of  i)roduction;  secondly,  by  our  ability  to  obtain  the 
raw  materials  at  low  cost.  Every  emi)loycr  knows  that 
among  (Mnploy<^s  who  arc  paid  by  the  piece,  it  is  the  opera- 
tive that  gains  the  largest  earnings  whose  ]>roduction  costs 
tlic  least,  because  under  the  control  of  such  operatives  the 
machinery  is  most  elTcctively  guided  during  working  hours. 
As  it  is  with  single  ojjcratives,  so  it  is  with  large  masses;  if 
well  instructeil  and  working  under  the  incentives  to  industry 
and  frugality  that  have  been  named,  their  large  product  will 
cam  for  them  ample  wages,  and  yet  result  in  a  low  cost  of 
labor  to  the  employer.  Such  workmen  never  have  any  "•  blue 
Jlonday. "  The  workman  who  in  this  country  iuil)itually  i)e- 
conies  intoxicated  is  soon  discharged,  and  his  place  is  lilled 
by  one  who  resj)ects  himself  and  values  his  place  too  much 
to  risk  his  position  in  dissipation. 

Competition  with  England  in  sup])lying  the  markets  of 
Asia,  Africa,  and  South  America  with  cott<m  goods,  is  now 
perhai)S  the  best  criterion  by  which  to  gauge  our  ability  to 
compete  in  othei-  branches  of  manufacture.  It  has  been 
often  assumed  in  England  that  the  increasing  shipments  of 
cotton  goods  from  this  country  have  been  forced  Ijy  necessity, 
and  merely  consisted  of  lots  sold  below  cost,  as  a  means  of 
obtaining  ready  money;  but  there  is  no  ground  whatever  for 
this  general  assumi)tion,  even  though  some  small  shipments 
may  have  been  made  at  first  with  this  view.  Our  export  of 
cotton  fabrics  amounts  as  yet  to  but  7  or  8  per  cent  of  our 
]>ro(luction,  and  is  but  a  ti-itle  compared  to  that  of  Clreat 
Ih'itaiu;  but  it  is  not  made  at  a  loss,  audit  constitutes  a 
most  important  element  in  the  returning  j)rosperity  of  our 
cotton-mills.  The  goods  exported  are  mostly  made  by  strong 
and  prosperous  corporations,  paying  regular  dividends,  and 
consist  mainly  of  coarse  sheetings  and  drills,  which  are  sold 
by  the  manufacturers  to  merchants,  who  seiul  them  to  China, 
Africa,  and  South  America  in  payment  for  tea,  silk,  ivory, 


426 


ECONOMIC  HISTORY. 


i 


P 

III' 


m 


^1 


I  J 

I   I 


sugar,  gums,  hides,  and  wool.  They  are  not  made  by  oper- 
atives who  earn  less  than  the  recent  or  present  rates  of  wages 
in  England,  but  in  most  dei»artments  of  the  mills  by  those 
who  earn  equal  wages,  or  even  more.  This  competition  had 
been  fairly  begun  before  tlie  late  war  in  this  country,  but  it  is 
now  continued  under  better  conditions.  The  mills  of  New 
England,  owing  to  through  connections  by  rail,  are  now 
relatively  much  nearer  the  cotton-lields  than  they  were  then. 
Prior  to  18G0  substantially  all  the  cotton  went  to  the  sea- 
ports of  the  cotton  States,  and  from  there  the  cost  of  moving 
it  to  the  North  or  to  Liverj)ool  varied  but  little ;  but  at  the 
present  day  a  large  and  annually  increasing  portion  of  the 
cotton  used  in  the  North  is  bought  in  the  interior  markets, 
and  is  carried  in  covered  cars  directly  to  the  mills,  where 
the  bales  are  delivered  clean,  and  much  more  free  from 
damage  and  waste  than  those  Avhich  arc  carried  down  the 
Southern  rivers  on  boats  and  barges  dumped  np(m  the 
wharves,  and  then  compressed  to  the  utmost  for  shipment 
by  sea. 

In  j)roof  that  this  advantage  is  an  actual  one,  the  following 
example  may  be  cited :  A  contract  has  just  been  made  for  the 
transportation  of  a  large  quantity  of  cotton  from  Texas  to 
Liverpool  at  the  rate  of  -fl.lO  per  100  pounds,  the  ))roportion 
assigned  to  the  land  carriage  being  70  cents,  to  transship- 
ment in  Boston  and  to  the  steamship  40  cents;  the  rate  of 
marine  insurance  is  three  eighths  of  1  per  cent,  and  the  cost 
of  handling  in  Liverpool  and  transportation  to  IManchester, 
not  less  than  a  quarter  of  a  cent  per  ])ound.  Bargains  may 
be  made  to  bring  cotton  from  the  same  point  in  Texas  to  the 
principal  factory  cities  of  New  England  at  the  rate  assigned 
to  the  land  carriage,  namely,  70  cents  per  100  pounds.  This 
cotton  is  brought  from  the  interior  towns  of  Texas  to  Boston 
and  cannot  be  carried  to  Liverpool  by  way  of  Galveston  or 
New  Orleans  so  chea])ly,  else  it  would  not  come  this  way. 
Assuming  the  bale  to  weigh  500  pounds,  at  10  cents  a  pound, 
wc  have  the  following  comparative  cost:  — 


THE  COTTON  MANUFACTURES. 


427 


LOWELL. 

Per  Bale.       Per  Cwt 

Cost  of  cotton  ill  Texas,  TjOO  pounds,  at  10 
cents,  including  all  local  charges   .     .     .     850  00 

Freight  to  Lowell  in  a  covered  locked  car  in 
which  the  cotton  is  protected  from  rain, 
mud,  and  otlier  causes  of  waste,  at  70 
cents  per  100  pounds 3  50 

Total $53  50      $10  70 

LANCASHIlU:. 

500  pounds,  at  10  cents,  including  all  local 

charfijes $50  00 

Freigiit  from  Texas  to  Liverpool,  at  $1.10 

per  100  pounds 5  50 

Lisurance  at  three  eighths  of  one  per  cent  on 

!»!5(> 21 

Transshipment  in  Liverpool,  and  freight  to 

Lancashire,  one  fourth  of  a  cent    ...         1  25 

Total $56  96        11  39 

Advantage  of  Lowell  over  Lancasliire    .     .      $3  40        30  69 

There  may  bo  changes  in  the  rates,  but  it  does  not  seem 
lirobablc  that  the  relation  of  the  land  to  the  ocean  late  can 
l»e  much  changed,  and  it  wotdd  therefore  aj)pear  tliat  the 
New  England  manui'aeturer  will  have  a  permanent  advantage 
in  the  price  of  American  cotton  of  any  given  grade,  varying 
from  (3  to  8  per  cent  as  the  price  of  cotton  may  vary  from 
12  to  9  cents  per  pound;  and  this  advantage  may  be  equal  to 
15  or  25  per  cent  in  ability  to  pay  wages,  as  the  cost  of  lal)or 
varies  from  a  rpiarter  to  a  third  in  the  total  cost  of  coarse 
and  medium  goods,  such  as  constitute  the  chief  part  of  the 
demand  of  the  world. 

It  may  be  said  that  this  proves  too  much,  and  that  the 
cotton  spinners  of  the  Southern  States  will  have  the  same 
relative  advantage  over  New  England.  Let  this  be  freely 
admitted.  We  are  treating  the  <|uestion  of  the  future 
supremacy  of  the  United  States  in  the  manufacture  as  well 
us  in  the  growth  of  cotton,  and  if  the  future  changes  in 


428 


ECONOMIC  HISTORY. 


I  i 


U 


'•'!i* 


Iff 


I' 


t    ( 


jiopnlation,  wcaltli,  and  condition  of  the  different  sections  of 
this  country  sliall,  in  the  future,  cause  the  increase  of  sjiin- 
dh's  especially  in  coarse  fabrics,  to  be  jihinted  in  the  heaKliy 
hill  country  of  northern  fJeorgia,  eastern  Tennessee,  and  the 
Carolinas,  it  will  simply  be  the  greater  evidence  that  natural 
laws  are  paramount.  If  Georgia  has  twice  the  advantage 
over  Lancashire  that  New  England  now  jiossesses  it  will 
only  be  the  fault  of  the  people  of  Georgia  if  they  do  not 
reap  the  benelit  of  it, 

]t  has  been  stated  that  our  present  rates  of  wages  in  our 
cotton  factories  are  higher  than  they  were  in  18(10,  and  with 
our  increasing  prosperity  they  will  tend  to  advance ;  but  at 
the  same  time  the  cost  of  the  labor  in  the  finished  fabric  has 
been  reduced  hij  the  ureater  produetive  power  of  the  maehinery. 
The  fabrics  npon  which  by  far  the  lai'gest  i)art  of  the  spin- 
dles and  looms  of  the  country  are  operated  may  be  divided 
substantially  into  the  following  classes:  — 

1.  Till'  printing-clotli,  28  indios  wide  iiiid  7  yards  to  the  jxmud. 
Tlit'coat  of  mill  lulxu"  in  making  tills  fabric,  iiu'buliiig  tlic  salaries, 
wages,  or  oarnings  of  every  one  t-mployed,  is  now  less  than  one 
cent,  or  a  lialf-ixMiiiy,  a  yard. 

'2.  Tlio  heavy  slu'cting,  3(5  inclics  wide  and  tlio  heavy  drill,  30 
iiK-lies  wide,  each  wcigliing  fniin  2;]  to  3  yards  to  the  pound.  The 
cost  of  mill  lalior  in  making  these  fabrics  is  about  1|  cents  per 
yard. 

3.  Shirtings  and  sheetings,  30  to  30  inches  wide,  Nos.  20  to  30 
yarns,  each  weigliing  from  3  to  4  yards  to  tlie  ixniiid.  The  cost  of 
mill  lal)or  in  these  goods  is  from  11  to  2  cents  per  yard. 

4.  The  fine  sheeting  or  shirting,  from  30  to  40  inches  wide, 
Nos.  30  to  40  yarns,  weighing  from  3  to  4  yards  to  the  jxniiid. 
The  cost  of  mill  labor  in  these  goods  is  from  1^  to  3  cents  per 
yard. 

r>.  Fabrics  of  a  similar  kind  to  the  above,  from  1  to  3  yards 
wide. 

C.  Heavy  cotton  duck,  cotton  grain-bags,  cotton  hose,  and  other 
special  articles. 

7.  IJliie  denims,  stripes,  tickings,  brown  denims  and  duck,  and 
other  heavy  colored  goods,  substantial  ginghams,  cottonades,  and 
other  fancy  woven  fabrics  of  medium  or  heavy  weight. 


THE   COTTON  MANUFACTURES. 


420 


These  seven  classes  coinpi'ise  more  than  9')  per  cent  of  our 
(!()tton  fabrics  in  weight;  to  them  are  to  l)e  added  hiwns, 
woven  fabric  of  liuht  weight  for  dresses,  and  spool-cotton. 

In  respect  of  one  half  of  these  fabrics,  beinji,'  those  of  the 
heavier  <!;rade,  our  proximity  to  the  cotton-lield,  computed  at 
not  less  than  half  a  cent  per  pound,  oftener  three  (puirters 
will  enable  the  X(!W  JMisiland  manufacturer  to  pay  from  15  to 
•JO  per  cent  higher  wa,ii,es  and  yet  to  make  the  goods,  other 
things  being  equal,  at  the  same  cost  as  his  competitor  in 
liancashire.  On  a  large  portion  of  the  other  kinds  this  ad- 
vantage in  the  cost  of  cotton  would  be  from  lU  to  lo  per 
cent. 

The  natural  advantages  cannot  work  immediate  results; 
the  ways  and  means  of  a  great  commerce  cannot  be  impro- 
vised in  a  year,  hardly  in  a  generation.  Much  depends  on 
the  Avisdom  of  our  legislators  in  framing  the  acts  under 
which  our  taxes  are  collected,  whether  customs  or  excise, 
and  yet  more  upon  our  adherence  to  a  sju'cic  l)asis  in  our 
currency;  but  in  the  long  run  the  only  reason  why  we  shall 
not  assume  a  constantly  increasing  share  in  the  cotton  manu- 
facture of  the  world  will  be  the  free  choice  that  our  country 
offers  for  other  occupations  of  a  more  profitable  or  more 
desiral)le  kind. 

Reference  has  l)een  made  to  the  small  proportion  of  fine 
spinning  in  the  United  States.  Within  the  last  few  years 
great  ))rogres3  has  been  made  in  spinning  and  weaving 
fabrics  of  Xos.  GO  to  100,  such  as  lawns  and  line  dress  goods, 
and  also  in  spinning  line  yarn  for  spool-cotton.  In  the  latter 
direction  yarns  as  line  as  No.  liiO  are  now  spun  on  the  ring 
spinning-frame,  a  machine  invented  in  this  country  and 
more  used  than  any  other  for  warp  spinning,  and  now  ])eing 
adojjted  in  Euro]>e.  Yai'us  as  line  as  ooO  are  spim  on  nmh-s 
lor  three-cord  sewing-cotton,  and  for  ex|teriment  much  limn" 
ounts  have  been  readied.  It  has  often  l)(>en  alleged  that 
line  yarns  could  not  be  as  well  spun  in  the  United  States  as 
in  England,  owing  to  tlie  dry  and  electrical  conditions  of  the 
atmosphere  din-ing  a  consideraltle  part  of  the  year.  This 
ditliculty  has  existed  in  some  degree,  although  not  so  as  to 


430 


ECONOMIC  HISTORY. 


i. 


I 


1 4  ■;'  •*       I         ' , 


li^^ 


i(>.,.. 


I- 


preclude  fine  work  if  it  lind  l»ccn  profitfil)lc  to  tindortakc  it; 
Ijut  as  far  as  tliis  diniciilty  (.'xisted  it  lias  lately  Iioom  entirely 
reiiKJVCMl  l)y  the  invention  of  a  very  simple  and  inexpensive 
apparatus  for  nioisteninji^  the  air  with  the  (inest  spray  of  jinre 
cold  water,  by  which  method  the  air  of  a  spinninjjj  or  weav- 
in;j;-room  may  be  kept  at  any  desired  detiree  of  humidity  in 
the  driest  day,  so  that  the  adverse  effect  of  electricity  is 
entirely  overcome. 

Whenever  the  condition  and  extension  of  our  market  will 
war'-ant  the  undertakin<r,  there  is  now  no  obstacle  to  our 
manufacturing  any  variety  of  cotton  fabric  that  is  in  de- 
manil,  either  coarse  or  linr. 

While  it  may  not  be  worth  while  to  pivc  historical  statistics 
in  relation  to  the  cotton  manufacture  of  this  country  in  the 
present  report,  a  few  words  may  well  be  devoted  to  chaufres 
in  the  work,  which  have  conduced  not  only  to  the  welfare  of 
the  people,   but  to  the  welfare  of  the  operatives  also. 

When  the  cotton  manufacture  was  first  established  in  the 
United  States  water-jiower  was  considered  essential  to  the 
work,  and,  as  a  rule,  the  location  of  mills  was  limited  to 
narrow  valleys,  or  places  where  there  was  room  only  for 
mills  of  several  stories  in  height.  The  first  mills  liuilt  were 
very  considerable  structures  for  their  time,  but  they  were 
low-studded,  badly  lighted,  and  were  heated  by  stoves;  and 
in  these  mills  the  operatives  were  compelled  to  work  under 
arduous  conditions  (owing  to  the  imperfection  of  the  machin- 
ery) thirteen  to  fourteen  hours  a  day.  These  narrow  struc- 
tures were  in  some  ])laces  built  seven  stories  in  height.  All 
the  jilans  were  made  with  reference  to  this  form  of  structure, 
whether  the  mill  was  to  be  operated  by  water-power  or  l>y 
steam,  until  (piite  a  recent  period.  In  18U0  the  "normal" 
cotton-mill  (so  to  speak)  hiul  become  a  factory  four  or  five 
stories  high,  aliout  00  feet  wide,  varying  in  length  according 
to  the  amount  of  machinery,  high-studded,  well  lighted, 
thoroughly  well  ventilated,  and  heated  by  radiation  from 
8team-))ipeg. 

In  18(50  the  mnfliino  for  sizing  yarn,  known  as  the 
"slasher"  was  first  imported,  displacing  the  machine  known 


THE  COTTON  MANUFACTURES. 


431 


ndcrtakc  it : 
iron  eutiri'ly 

inex[H'n«iv(' 
ipray  of  i>iiro 
hi<;!;  or  woav- 

Imiuiility  in 
electricity  ia 

r  marl<ot  will 
staclc  to  our 
lat   is  ill  il*'- 

rical  statistics 
country  in  the 
oil  to  chantrca 
the  woUarc  of 
vos  also, 
iblirtlioil  ill  the 
iscntial  to  the 

as  limited  to 
room  oiily  for 
liUs  l>nilt  were 
but  they  were 
)y  stoves;  and 

to  work  luuler 

of  the  niaehin- 
0  narrow  struc- 
iu  height.     AH 
m  of  structure, 
or-power  or  by 
)  the  "  nornuil  " 
ory  four  ov  five 
LMiLrth  according 
well    liiihtcd, 

radiation  from 

known    as    the 
machine  known 


as  the  "dresser."  In  the  use  of  the  shislier  ono  man  and  a 
hoy  working  in  a  thoroughly  well-ventilated  I'ooni,  at  a 
moderate  degree  of  heat,  took  the  jtlaeo  of  seven  or  eight 
men  who  had  l)een  previously  eniployed  in  the  .same  work  in 
!i  room  which  was  of  necessity  kept  at  over  100'^  F.,  the  at- 
mosphere saturated  with  sotw  starch.  Tliis  change  removed 
the  only  really  objectionable  kind  of  woi'k  from  the  cottcm 
factory,  in  the  earlier  mills  the  apparatus  for  the  removal 
of  dust  from  the  factory  was  very  imperfect,  but  to-day  every 
room  oven  including  those  in  which  tlie  cotton  is  0])ened,  is 
sul)stantially  free  from  dust;  and  it  happens  that  the  degree 
of  heat  and  of  Innnidity  recpiirod  for  the  best  work  of  the 
cotton  factory  is  ono  which  conduces  in  great  measure  to  the 
health  of  the  operative,  perhaps  a  little  warmer  than  may  be 
desirable. 

At  the  present  time  another  change  is  in  progress.  Tlie 
use  of  water-power  is  becoming  less,  its  developnu'nt  for  the 
purpose  of  sale  having  never  proved  prolitalde.  The  power 
thus  develoj)ed  has  boon  a  valuable  auxiliary  in  the  working 
of  the  factory,  but  as  a  nuitter  of  investment  the  develo])nu'nt 
of  land  and  water-power  together  have  almost  without  cx- 
cejition  failed  to  be  profitable. 

The  great  progress  in  the  constructiim  of  the  steam-engine 
and  in  the  econ(miy  of  fucd  is  steadily  working  towards  a 
change  to  steam  as  the  principal  motive-power  for  the  cotton 
factory.  An  Incidental  advantage  in  this  change  is  that  the 
factory  may  be  placed  nearer  to  the  principal  markets,  where 
it  can  be  more  conveniently  supervised  and  more  easily 
reached.  The  use  of  st(Muu  also  renders  a  choice  of  location 
perfectly  fi'asil)le;  and  the  modol  factory,  one  or  two  stories 
high,  may  be  placed  upon  a  level  plain,  and  can  b(!  more 
easily  lighted  and  ventilated  and  mon'  economically  operated 
than  when  any  othei-  form  of  biiildiiur  is  used,  Uiuler  these 
new  conditions,  better  dwelling's  for  the  operativt^s,  less 
crowded,  can  also  bo  provided,  and  in  every  respect  the  work 
can  be  conducted  under  better  conditions. 

At  the  present  time  the  hours  of  laltor  in  New  England, 
Avliere  most  of  the  cotton  manufacturing  is  done,  vary  from 


w 


.  m- 


I. 


if 


■ 


p™^i' 

m':f'        1* 

B'*' 

■  > ' 

n''  , 

i''  '  ■ 

if' .  i 

ii    ' 

l! 

m ) 


ii 


432 


ECONOMIC  HISTORY. 


ten  ti)  clcvpn  hours  \n'V  diiy.  Tliirt  jfrcal  clianfjfo  lias  hccn 
hroii^lit  iil)()ut  by  ii  {iiadual  ('()in|in'licnsi(»ii  (tf  the  licHt  con- 
ditioiitf  both  for  \\w  hiboror  and  lor  tlic  capitaliHt,  and  witli- 
out  niiK'li  rct^ard  to  IcLvislaiion.  It  i«  iirultaldc  lliat  ere  lon<r 
ten  hours  will  l)o  tlu;  limit  of  fat-toi-y  work  throniihoiil  New 
Knj;land,  citiior  by  process  of  If^'islalion  or  through  tiic 
conviction  on  Ihr  part  of  ciMploycrs  that  any  lonjrcr  hours 
arc  not  prolitablc, — a  conclusion  to  which  niiiuy  have  al- 
ready come. 

A  <rreat  chanire  has  also  in  the  progress  of  time  been 
effected  in  the  dwellings  in  which  the  factory  operatives 
live,  in  part  tending  towai'ds  liettei-  conditions,  in  part  to 
worse  conditions.  On  the  wlnde  there  has  Im'cu  less  average 
[>rogress  in  this  directinu  than  in  the  construction  and  opera- 
tion of  the  mills  themselves.  Th(!  elujice  of  position,  how- 
ever, wliich  is  now  given  by  the  greater  use  (jf  steam,  gives 
better  opportunities  for  scattering  the  dwelling-houses  over 
a  wider  area  at  little  cost. 

A  more  al)imdant  supply  and  choice  of  food  has  been 
effected  in  this  as  in  all  other  l)ranches  of  work,  to  the  great 
benefit  of  the  operatives,  by  the  consolidation  and  more 
effective  service  of  railroads.  Tiie  average  work  of  a  male 
operative  over  sixteen  years  of  age  in  a  tex.ile  fact(uy  will 
earn  enough  in  a  day  to  pay  for  the  transportation  of  meat 
and  lu'cad  for  one  year,  one  thousand  miles,  or  from  Chi- 
cago to  Lowell,  Lawrence,  or  Fall  River.  So  far  as  cost  is 
concerned,  the  grea4;  fields  of  the  West  and  the  factoiies  of 
the  East  arc  in  closer  ])roxlmity  than  if  the  factory  depended 
for  its  food  upon  its  own  immediate  neiuhboihood,  when 
served  only  by  wagon-roads.  The  same  changes  which  have 
Si)  greatly  reduced  the  railway  charges  between  East  and 
West  are  now  taking  ])lace  between  North  and  South.  The 
charge  for  moving  cotton  is  becimung  less  year  1 
it  will  soon  matter  little  where  the  cottni  fm' 
so  far  as  distance  between  the  field  : 
cerned.  The  choice  may  be  made  so  a  seem. 
lus  of  a  moderately  cold  climate,  in  wi  li  in-d' 
more  to  be  desired  than  out-door,  in  which  th    humidity  of 


M  I, 

I.- 
St      .11- 

abor  is 


Till::  COTTON  MANUFACTURES. 


433 


Ih 

- 

cm 

,'  St 

Il- 

n-.l 

r  liihor 

ls 

tl. 

Imiuitlity 

of 

the  atiiioHplu'rc  is  inciirtural)ly  unifonn  or  is  not  subject  to 
extremes,  uiitl  wliero  facilities  for  repairs  on  niachiiiery  are 
close  at  hand,  and  the  iio|»iilation  is  siidieienlly  dense  to 
assure  an  adiMjiiate  and  constant  supply  ol  operatives, — ■mills 
wiiieh  are  nnicli  isolated  always  woriiin^  at  a  disadvantai^e. 

(Jreat  changes  of  a  lu'nelicial  kind  can  now  be  foroHoen  in 
the  application  of  electricity  to  the  liLditim?  of  the  factory. 
The  (levi'Io]iiiieiits  in  this  direction  are  also  such,  that,  what- 
ever the  relative  cost  of  the  electric  liiJiht  as  compared  (o  j^as 
may  lie,  it  is  yet  so  lienelicial  in  other  respects,  that  no  fac- 
tory manauer  can  well  afford  to  dispense  with  it,  not  only 
because  of  the  more  perfect  work  which  its  use  assures,  but 
becausi!  th(^  choic(»  of  the  operative  in  selectinu;  the  place  in 
which  to  work  will  render  the  use  of  the  electric  light  almost 
a  nuitter  of  necessity. 

In  eon(dusion,  it  may  bo  said  tlnit  the  progress  in  the  art 
of  manufacturing  cotton  fal)rics  in  the  last  forty  years  has 
been  very  great,  distinctly  sustaining  the  rule  which  affects 
all  the  arts  to  which  modern  machinery  can  be  applied, 
namely,  that,  in  i»roi)ortion  to  the  effectiveness  of  capital  in 
the  form  of  machinery  and  the  freedom  with  which  it  may 
l)e  applied,  the  cost  of  production  is  lessened  and  the  con- 
sumer is  served  more  cheaply;  while,  on  the  other  hand,  tho 
wages  of  the  operatives  arc  increaseil,  the  conditions  of  work 
made  better,  and  the  identity  of  interests  between  labor  and 
capital  are  established. 

It  may  be  said  that  in  the  absence  of  any  artificial  obstruc- 
tions to  trailic  between  ."^tates  or  nations,  the  truest  guide  to 
the  place  where  the  lowest  cost  of  production  is  couipassed 
may  be  found  by  ascertaining  where  the  wages  of  labor  are 
the  highest,  and  tho  conditions  of  life  the  best;  that  at  that 
point  the  lowest  cost  of  ])roduction  must  be  found  for  this 
reas(m :  both  wages  and  profits  are  derived  from  the  sale  of 
the  thing  produccfl ;  heiu;e  it  follows  that  where  the  natural 
conditions  of  production  arc  best,  the  machinery  most  ef- 
fective, and  the  labor  tho  most  intelligent  and  skilful,  the 
product  will  be  largest  at  the  least  etfort  to  those  who  do  the 
work,  and  when  the  division  of  this  product  is  made  under 

28 


Mi'.." 


Hi 

4. 


}*" 


t; 


I '' 


r    ■     It  ; 


484 


ECONOMIC  HISTORY. 


the  conditions  of  absolutely  free  competition,  the  relative 
proportion  which  capital  can  secure  to  itself  will  bo  least, 
even  though  its  absolute  share  be  greater  and  greater  as  the 
years  go  on;  but  the  share  which  the  laborer  will  receive 
will  increase  year  by  year,  both  absolutely  and  relatively. 
As  capital  increases  the  absolute  sum  of  profits  is  greater, 
but  the  relative  share  of  the  product  secured  by  capital  be- 
comes less.  The  increase  of  capital  and  its  effective  use  by 
skilled  laborers  assure  a  larger  production,  and  the  workman 
obtains  a  larger  share  of  a  larger  product,  measured  in  kind 
or  in  ^\ages  paid  in  money.  In  the  cotton-mill,  as  well  as 
in  many  other  arts,  special  skill  is  required,  but  perluips 
loss  general  intelligence ;  therefore  a  lower  grade  of  opera- 
tives may  be  employed  from  iime  to  time  as  the  machinery 
becomes  more  automatic,  but  at  a  steadily  increasing  rate  of 
wages.  Invention  may,  therefore,  be  said  to  enable  all  con- 
ditions of  men  to  attain  a  higher  plane  of  material  welfare, 
and  as  one  class  passes  from  the  factory  to  other  occui)ation8 
which  offer  better  conditions  of  life,  new  imjirovemeuts  ena- 
ble those  who  could  not  do  the  factory  work  before,  to  under- 
take and  carry  it  on.  Thus  it  has  been  in  the  j)a8t,  since 
the  farmers'  daughters  of  New  England  left  the  factory,  in 
which,  with  much  longer  hours  of  work,  they  earned  only 
about  one  half  the  wages  now  paid ;  but  those  who  have  suc- 
ceeded them  could  not  then  have  been  capable  of  doing  the 
work  at  all  which  they  now  so  easily  accomplish. 


Mi 


mim 


1  ^ 

( 

(!   i 
1     i 

THE  IRON  AND  STEEL  INDUSTRIES. 


435 


THE  IRON  AND   STEEL  INDUSTRIES. 

From  Swank's  Statistics  of  the  Iron  and  Steel  Production, 
Tenth  Census,  Vol.  II.  I'l'.  886-800. 


Important  Uses  of  Iron  and  Steel. 

The  people  of  the  United  States  are  the  largest  per  capita 
consumers  of  iron  and  steel  in  the  world,  and  of  all  nations 
they  are  also  the  largest  aggregate  consumers  of  these  pro- 
ducts. Great  Britain  makes  more  iron  than  we  do,  but  she 
exports  about  one  half  of  all  that  she  makes.  She  exports 
more  than  one  half  of  the  steel  that  she  makes,  and  yet  makes 
but  little  more  than  this  countr}'.  No  other  European  coun- 
try equals  Great  Britain  either  in  the  per  capita  or  aggregate 
consumption  of  iron  and  steel.  This  country  is  not  now 
producing  as  much  iron  and  steel  as  it  consumes,  but  imports 
huge  quantities  of  both  products,  CJreat  Britain  being  the 
principal  source  of  our  foreign  sup[)ly.  Our  exports  of  iron 
and  steel  are  only  nominal. 

A  simple  enumeration  of  some  of  the  more  important  uses 
to  which  iron  and  steel  arc  applied  by  our  people  will  show 
how  prominent  is  the  part  these  metals  play  in  the  develop- 
ment of  American  civilization  and  in  tho  advancement  of 
our  greatness  and  power  as  a  nation. 

We  have  built  almost  as  many  miles  of  railroad  as  the 
whole  of  Europe,  and  C(msequently  have  used  in  their  con- 
struction almost  as  many  rails,  and  now  use  almost  as 
many  railroad  cars  and  locomotives.  At  the  close  of  18S1 
this  country  had  100,000  miles  of  railroad,  Europe  had 
about  106,000  miles,  and  all  the  rest  of  the  world  had  about 
4'), 000  miles.  The  Unite*'.  States  had  nineteen  miles  of 
railroad  to  every  10,000  of  population,  while  Europe  h.ad  a 
little  more  than  three  miles  to  the  same  population.  Rail- 
roads, it  is  well  known,  annually  consume  more  than  ono 
half  of  the  world's  production  of  iron  and  steel, — rails, 


1 

h 

j 


436 


ECONOMIC  HISTORY, 


Ut^ 


m\ 


•f': 


bridges,  cars,  and  locomotives  being  impossible  without 
these  metals.  The  street  railway  is  an  American  invention 
which  also  consumes  large  quantities  of  iron  and  steel,  and 
we  arc  far  in  advance  of  every  ether  nation  in  its  use.  We 
were  also  the  first  nation  in  the  world  to  introduce  elevated 
railways  especially  to  facilitate  travel  in  large  cities.  In  the 
construction  of  our  New  York  elevated  railways  beauty  of 
design,  fitness  of  parts,  and  strength  of  materials  have  been 
80  perfectly  combined  as  to  excite  the  admiration  of  all  who 
behold  them.  We  are  the  foremost  of  all  nations  in  the  use 
of  iron  and  steel  in  bridge-building  for  railroads  and  ordinary 
highways,  and  the  lightness  and  gracefulness  of  our  bridges 
are  nowhere  equalled,  while  their  strength  and  adaptability 
to  the  uses  to  which  they  arc  required  are  nowhere  surpassed. 
In  the  use  of  iron  for  water-pij)es  and  gas-pipes  we  are  prol)- 
ably  in  advance  of  every  other  nation.  We  make  more  iron 
stoves  for  heating  halls  and  dwellings  and  for  the  i)urposos 
of  the  kitchen  than  all  the  rest  of  the  world,  and  in  the  use 
of  heaters  and  ranges  wc  are  behind  no  other  nation.  Our 
household  stoves,  both  for  heating  and  cooking,  are  works  of 
real  art  as  well  as  of  utility.  They  are  ornaments  of  Ameri- 
can homes,  instead  of  luniig  conveniences  simply.  Our  heat- 
ing stoves  are  especially  handsome,  bright,  cheerful,  health- 
ful, and  clean.  In  all  resi)ects  they  form  the  best  combination 
of  desirable  qualities  yet  devised  for  the  heating  of  private 
dwellings.  Cooking  and  other  domestic  utensils  of  iron  have 
always,  even  in  colonial  days,  been  freely  used  in  American 
households,  Wc  make  liberal  use  both  of  cast  and  wrought 
iron  in  the  construction  of  public  and  private  buildings.  Our 
use  of  iron  for  these  purposes  has  in  late  years  been  quite 
marked,  and  in  no  respect  more  so  than  in  the  truly  artistic 
eflects  which  we  give  to  this  metal.  We  probably  excel  all 
nations  in  the  use  of  iron  for  ornamental  purposes  in  connec- 
tion with  masonry, brick-work, and  wood-work.  Pine  illustra- 
tions of  the  artistic  combination  of  inm  with  other  materials 
may  bo  seen  in  the  interior  of  the  new  State  Department 
building  at  Washington  and  in  the  interior  of  the  new  passen- 
ger depot  of  the  Pennsylvania  railroad  at  Philadelphia.    Wo 


THE  IRON  AND   STEEL  INDUSTRIES. 


437 


load  the  world  in  the  use  of  iron  and  steel  wire  for  fencing 
jmrpcjsea,  and  we  have  more  miles  of  telegraph  wire  in  use 
tlian  any  other  country.  Barbed-wire  fencing  is  an  Ameri- 
can invention.  We  have  made  creditable  progress  In  the  con- 
struction of  iron  ships,  and  we  would  have  made  much  greater 
progress  if  the  same  encouragement  that  has  been  given  by 
other  nations  to  their  shipping  interests  had  been  given  to 
ours.  We  use  immense  (juantities  of  plate-iron  in  the  stor- 
age, transportation,  and  refining  of  petroleum,  in  the  produc- 
tl(m  of  which  nature  has  given  us  almost  a  monojmly.  The 
oil-wolls  themselves  yearly  require  thousands  of  tons  of  iron 
pipes  for  tubing.  We  make  liberal  use  of  plate  and  sheet  iron 
in  the  construction  of  the  chimneys  of  steamboats  on  our  lakes 
and  livers,  and  in  the  construction  of  factory,  rolling-mill, 
and  blast-furnace  chimneys,  and  the  stacks  of  blast-furnaces. 
American  jdanishcd  sheet-iron  has  almost  entirely  super- 
sudcd  Russia  sheet-iron  in  our  markets.  We  use  it  for  loco- 
motive jackets,  in  the  manufacture  of  stoves  and  stove-pipe, 
and  for  many  other  i)urp()ses.  Wo  are  the  largest  consumers 
of  tin  plates  in  the  world, — Great  Britain,  their  principal 
niiinufacturer,  sending  us  annually  more  than  one  half  of  her 
whole  j)r()duct.  I'ortaljle  and  stationary  engines  consume 
large  quantities  of  iron  and  steel.  Our  beautiful  steam  fire- 
engines  are  the  product  of  American  taste  and  skill,  if  they 
are  not  strictly  an  American  invent i(m,  and  we  annually 
make  large  numbers  of  Ihcm  for  home  use  and  f(tr  exporta- 
tion. Anchors  and  chains,  cottcm-presses  and  cotton-ties, 
sugar-pans  and  salt-pans,  and  general  foundry  and  machine 
work  annually  require  large  (piantities  of  either  iron  or  steel. 
We  make  our  own  cotton  i.nd  wot)llen  manufacturing  machin- 
ery, and  nearly  all  the  other  machinery  that  we  use.  The 
manufacture  of  the  printing-presses  of  the  country  consumes 
immense  (puintities  of  iron  and  steel.  No  other  country 
makes  sueh  free  use  of  the  ])rinf ing-pross  as  this  country. 
We  are  the  leading  agricultural  nation  of  the  woild,  and 
hence  are  the  largest  consumers  of  agricultural  implements; 
l)ut  we  are  also  in  advance  of  every  other  nation  in  the  use 
of  agricultural   machinery.     Our  use  of  iron  and  steel  in 


..-..Iv',  .W'i'    f  , 


438 


If  P  ■  .  r  i 


I*-.  .    If;  .^1. 


ECONOMIC  HISTORY. 


agriculture  takes  rank  next  to  their  use  in  the  construction 
and  maintenance  of  railroads.  We  lead  all  nations  in  the 
manufacture  of  cut-nails  and  spikes.  Having  a  larger  and 
more  rapidly  increasing  population  than  any  other  country 
that  is  noted  for  its  consumption  of  iron,  we  are  consequently 
the  hirgost  consumers  of  nails  and  spikes  in  the  construction 
of  dwellings  and  public  buildings,  stores,  warehouses,  oHices 
and  similar  structures.  Our  extended  and  varied  mining 
operations  consume  iron  and  steel  in  large  quantities.  So 
do  our  manufactures  of  scales  and  balances,  letter-presses, 
burglar-proof  and  fire-p"  <^  safes,  sewing-machines,  and 
wagons  and  carriages.  Sv...ing-machincs  are  an  American 
invention.  Considerable  quantities  of  iron  or  iron  and 
steel  are  used  for  sewer  and  other  gratings,  street-crossings, 
iron  pavements,  lamp-posts,  posts  for  awnings,  all  sorts  of 
small  hardware,  horseshoes  and  hoi'scshoe  nails,  wire-rope, 
iron  hoops,  iron  cots  and  bedsteads,  woven-^Vire  mattresses, 
iron  screens,  iron  railings,  and  fire-anns.  In  the  manufac- 
ture of  machine  and  hand  tools  and  general  cutlery  we  are 
excelled  by  no  other  nation,  and  in  the  use  of  machine  tools 
we  are  in  advance  of  every  other  nation.  In  general  cutlery 
our  saws  and  axes  especially  enjoy  a  world-wide  reputation. 
Not  the  l^ast  important  use  to  which  iron  and  steel  are  put 
in  this  coi  ntry  is  in  the  extension  of  the  iron  industry  itself, 
—  every  blast-furnace,  rolling-mill,  or  steel  works  that  is 
erected  first  devouring  large  (pumtities  of  these  products 
before  contributing  to  their  general  supply. 

In  the  substitution  of  steel  for  iron  (his  eountry  is  rapidly 
progressing,  especially  in  the  construction  and  equipment  of 
its  railroads.  During  the  past  few  years  fully  two  thirds  of 
all  the  rails  that  have  l)een  laid  on  American  railroads  have 
been  mnde  (.f  Bessemer  steel,  and  at  present  a  still  larger 
proportion  of  steel  rails  is  rocpiired  by  our  railroad  coni- 
|»anies.  On  sev-al  American  railroads  the  boilers  of  all 
new  locomotives  re  now  required  to  be  made  of  steel,  and 
the  tendency  is  toward  tlie  exclusive  use  of  steel  for  locomo- 
tive boilers,  and  its  general  use  for  stationary  and  marine 
boilers.     The  tires  of  American  locomotives  arc  now  made 


THE  IRON  AND  STEEL  INDUSTRIES. 


439 


.4" 


exclusively  of  steel,  and  the  fire-boxes  of  our  locomotives  are 
generally  made  of  steel.  The  steel  used  in  the  construction 
of  American  locomotives  is  now  chiefly  produced  by  the  open- 
hearth  process.  We  have  built  a  few  steel  bridges,  but  there 
is  no  marked  tendency  to  substitute  steel  for  iron  in  bridge- 
building.  Steel  is,  however,  largely  used  in  the  manufacture 
of  wire,  including  wire-fencing,  and  for  car  and  carriage 
axles,  carriage  tires,  fire-arms,  screws,  and  many  other  pur- 
poses. But  little  steel  has  yet  been  used  in  this  country  for 
nails  and  horse-shoes. 

Mention  has  been  made  of  the  artistic  finish  of  some  of  our 
iron-work;  but  the  subject  seems  worthy  of  further  notice. 
It  is  not  only  in  stove-founding,  in  the  graceful  designs  of 
bridges  and  elevated  railways,  and  in  the  delicate  combina- 
tion of  iron  with  other  materials  in  the  construction  and 
ornamentation  of  buildings  that  American  iron-workers  have 
displayed  an  excjuisite  taste  and  a  b'^ld  and  dexterous  touch. 
The  fine  arts  themselves  are  being  enriched  by  the  achieve- 
ments of  our  iron- working  countrymen.  An  iron  foundry 
at  Chelsea,  in  Massachusetts,  has  recently  reproduced,  in 
iron  castings,  various  works  of  art  with  all  the  fidelity  and 
delicacy  of  Italian  iron-founders.  The  most  delicate  antique 
patterns  have  been  successfully  copied.  Shields  representing 
mythological  groups  and  classic  events,  medallions  contain- 
ing copies  of  celebrated  portraits,  panels  containing  flowers 
and  animals,  an  imitation  of  a  Japanese  lacquer-tray  one 
sixteenth  of  an  inch  thick,  and  a  triumphal  procession  repre- 
sented on  a  large  salver  comprise  some  of  the  work  of  the 
Chelsea  foundry.  Some  of  the  castings  have  been  colored  to 
represent  bronze,  and  others  to  represent  steel,  Avhile  others 
again  preserve  the  natural  color  of  the  iron.  The  bronzed 
castings  resemble  beaten  work  in  copper.  Only  American 
iron  is  used.  The  ornamental  uses  to  which  art  castings  of 
iron  may  be  ))ut  are  many,  and  as  thoy  can  1)0  cheaply  pro- 
duced it  may  be  assunicMl  that  a  demand  will  ere  long  be 
created  for  them  that  will  be  in  keeping  with  the  artistic 
taste  which  has  been  so  generally  developed  in  our  country 
during  the  past  few  years. 


'   i'. 


■•I    .  ■ 


ja\ 


440 


ECONOMIC  HISTORY. 


m   ' 


We  conspicuously  fall  behind  many  other  nations  in  the 
use  of  iron  and  steel  for  military  purposes.  We  maintain 
only  a  small  standing  army  and  a  small  navy,  and  hence  have 
but  little  use  for  iron  or  steel  for  the  supply  of  either  of  these 
branches  of  the  public  service.  We  are  also  behind  many 
other  nations  in  the  use  of  iron  and  steel  sleepers  for  rail- 
way tracks.  We  yet  have  an  abundance  of  timber  for  railway 
cross-ties,  and  hence  do  not  need  to  substitute  either  iron  oi* 
steel  cross-ties.  Except  possibly  as  an  experiment,  there  is 
not  an  iron  or  steel  cross-tie  in  use  in  this  country.  It  is  a 
singular  fact  that  we  still  import  many  blacksmith's  anvils, 
their  manufacture  being  a  branch  of  the  iron  business  to 
which  we  have  not  yet  given  adequate  attention.  Anvils  of 
the  best  quality  are,  however,  made  in  this  country.  A  far 
inore  serious  hiatus  in  our  iron  industry  is  found  in  the  al- 
most total  absence  of  the  manufacture  of  tin  plates,  the  basis 
of  which  is  sheet-iron,  as  is  well  known.  As  we  can  import 
the  crude  tin  as  easily  as  we  import  other  commodities,  our 
failure  thus  far  to  manufacture  tin  plates  must  be  ascribed  to 
the  only  true  cause,  — our  inability  to  manufacture  sheet-iron 
and  coat  it  with  tin  as  cheaply  as  is  done  by  British  manu- 
facturers. It  is  not  improbable  that  tin  ore  may  be  yet  dis- 
covered in  our  own  country  in  sufficiently  large  quantities  to 
supply  any  domestic  demand  that  may  be  created  for  its  use. 

Conclusion. — In  reviewing  the  historical  pages  of  this 
report  the  most  striking  fact  that  presents  itself  for  consid- 
eration is  the  great  stride  made  by  the  world's  iron  and  steel 
industries  in  the  last  hundred  years.  In  1788  there  were 
only  eighty-five  blast-furnaces  in  Great  Britain,  most  of 
which  were  small,  and  their  total  production  was  only  08,300 
tons  of  ]tig-iron.  In  1880  Great  Britain  had  907  ftirnaces, 
many  of  which  were  very  large,  and  their  production  Avas 
7,740,233  tons.  A  hundred  years  ago  there  were  no  rail- 
roads in  the  world  for  the  trans|)ortation  of  freight  and  \va»- 
sengers.  Iron  ships  were  unknown,  and  all  the  iron  l)ridges 
in  the  world  could  be  cotmted  on  the  fingers  of  one  hand. 
Without  railroads  and  their  cars  and  locomotives,  and  with- 
out iron  ships  and  iron  bridges,  the  world  needed  but  little 


THE  IRON  AND  STEEL  INDUSTRIES. 


441 


iron.  Steel  was  still  less  a  necessity,  and  such  small  quan- 
tities of  it  as  were  made  were  mainly  used  in  the  manufac- 
ture of  tools  with  cutting  edges. 

The  great  progress  made  by  the  world's  iron  and  steel 
industries  in  the  last  hundred  years  is  as  marked  in  the 
improvement  of  the  processes  of  manufacture  as  in  the  in- 
creased demand  for  iron  and  steel  products.  A  hundred 
years  ago  all  bar-iron  was  laboriously  shaped  under  the  trip- 
hammer; none  of  it  was  rolled.  Nor  was  iron  of  any  kind 
refined  at  that  time  in  the  puddling  furnace ;  it  was  all  refined 
in  forges,  and  much  of  it  was  made  in  i)rimitive  blooraary 
forges  directly  from  the  ore.  Nearly  all  of  the  blast-furnaces 
of  a  hundred  years  ago  were  blown  with  leather  or  wooden 
bellows  by  water-power,  and  the  fuel  used  in  them  was  chiefly 
charcoal.  Steam-power,  cast-iron  blowing-cylinders,  and  the 
use  of  bituminous  coal  had  just  been  introduced.  Loss  than 
sixty  years  ago  heated  air  had  not  been  used  in  the  blowing 
of  blast-furnaces,  and  fifty  years  ago  anthracite  coal  had  not 
been  used  in  them,  except  experimentally.  Thirty  years  ago 
the  Bessemer  process  for  the  manufacture  of  steel  had  not 
Ijeen  heard  of,  and  the  open-hearth  process  for  the  manufac- 
ture of  steel  had  not  been  made  a  practical  su-ccss.  Thirty 
years  ago  the  regenerative  gas  furnace  had  not  been  invented. 
The  nineteenth  century  has  been  the  most  prolific  of  all  the 
centuries  in  inventions  which  have  improved  the  methods  of 
manufacturing  iron  and  steel,  and  which  have  facilitated 
their  production  in  large  quantities. 

The  next  most  important  fact  that  is  presented  in  the 
historical  chapters  of  this  report  is  the  astonishing  prog- 
ress which  the  iron  and  steel  iiulustrles  of  the  United  States 
liavc  made  within  the  last  twenty  years.  During  this 
period  we  have  not  only  utilized  all  contemporaneous  im- 
provements in  the  manufacture  of  iron  and  steel,  l)ut  we  have 
shown  a  special  aptitude,  or  genius,  for  the  use  of  such  im- 
provements as  render  possible  the  production  of  iron  and 
steel  in  large  quantities.  Enterprising  and  courageous  as 
the  people  of  this  country  have  always  been  in  the  manu- 
facture  of  iron  and   steel,    they  have   shown    in  the   last 


■'  m 


mf 


442 


ECONOMIC  HISTORY. 


twenty  years  that  they  have  in  all  respects  been  fully  alive 
to  the  iron  and  steel  requirements  of  our  surprising  national 
development.  If  we  had  not  applied  immense  blowing- 
engines  and  the  best  hot-blast  stoves  to  our  blast-furnaces 
our  present  large  production  of  pig-iron  would  have  been  im- 
possible. If  we  had  not  built  numerous  large  rolling-mills 
we  could  not  have  had  a  suflicient  supply  of  plate-iron  for 
locomotives  and  other  boilers,  the  hulls  of  iron  ships,  oil- 
tanks,  nails  and  spikes,  and  other  important  uses;  nor  of 
8heet-ir(m  for  stoves  and  domestic  utensils;  nor  of  tee,  angle, 
and  channel  iron  for  bridge-building  and  general  construc- 
tion purposes;  nor  of  iron  rails  for  our  railroads;  nor  of  bar- 
iron  and  rod-iron  for  a  thousand  uses.  If  we  had  not  i)roniptly 
introduced  the  Bessemer  j)roce8s  the  railroads  of  the  country 
could  not  have  been  8up|»lied  with  steel  rails,  and  without  the 
four  and  a  half  million  t(ms  of  American  steel  rails  that  have 
been  laid  down  in  the  past  twelve  years  our  trimk  railroads 
could  not  have  carried  their  vast  tonnage  of  agricultural  and 
other  products,  for  iron  rails  could  not  have  endured  the  wear 
of  this  tonnage.  If  we  had  not  established  the  manufacture 
of  crucible  steel  and  introduced  the  open-hearth  process  there 
would  have  been  a  scarcity  of  steel  in  this  country  for  the 
manufacture  of  agricultural  imjdemcnts,  8i)ring8  for  railway 
passenger-cars,  tires  for  locomotives,  etc.  Foreign  coimtries 
could  not  in  late  years  have  supplied  our  extraordinary  wants 
for  pig-iron,  rolled  iron,  iron  and  steel  rails,  and  crucible 
and  open-hoarth  steel,  for,  if  there  were  no  other  reasons, 
the  naturally  conservative  character  of  their  ju'ople  would 
have  prevented  them  from  realizing  the  magnitude  of  those 
wants.  If  our  iron  and  steel  industries  had  not  been  devel- 
oped in  the  past  twenty  years  as  they  have  been  it  is  clear 
that  our  railroad  system  could  not  have  been  so  wonderfully 
extended  and  strengthened,  and  without  this  extension  of 
our  railroads  we  could  not  have  produced  our  large  annual 
surplus  of  agricultural  products  for  exportation,  nor  could 
our  population  have  been  so  largely  increased  by  immigration 
as  it  has  been. 
We  cannot  fully  comprehend  the  marvellous  nature  of  the 


THE  IRON  AND  STEEL   INDUSTRIES. 


448 


s  nature  of  the 


changes  which  have  taken  place  in  the  iron  and  steel  indus- 
tries of  this  country  in  recent  years,  unless  we  compare  the 
early  history  of  those  industries  with  their  present  devel- 
opment. 

In  Alexander  Hamilton's  celebrated  "Report  on  the  Sub- 
ject of  Manufactures,"  presented  to  Congress  on  the  oth  of 
December,  1791,  just  ninety  years  ago,  it  was  stated  with 
evident  satisfaction  that  "the  United  States  already  in  a 
great  measure  supply  themselves  with  nails  and  spikes,"  so 
undeveloped  and  primitive  was  her  iron  industry  at  that  time. 
In  the  preceding  year,  1790,  "  Morse's  Geography"  claimed, 
in  a  description  of  New  Jersey,  that  "  in  the  whole  State  it 
is  supposed  there  is  yearly  made  about  1,200  tons  of  bar- 
iron,  1,200  ditto  of  pigs,  and  80  of  nail  rods;"  and  in  1802 
it  was  boastingly  declared  in  a  memorial  to  Congress  that 
there  were  then  150  forges  in  New  Jersey,  "which  at  a 
moderate  calculation  would  produce  twenty  tons  of  l)ar-iron 
each  annually,  amounting  to  3,000  tons."  In  1880  there 
were  several  rolling-mills  in  New  Jersey  and  several  hundred 
in  the  United  States  which  could  each  produce  much  more 
bar-iron  in  a  year  than  all  of  the  150  forges  of  New  Jersey 
would  produce  in  1802. 

Less  than  fifty  years  ago  the  American  blast-furnace  which 
would  make  four  tons  of  j)ig-iron  in  a  day,  or  twenty-eight 
tons  in  a  week,  was  doing  good  work.  "Wo  had  virtually 
made  no  progress  in  our  blast-furnace  practice  since  cobmial 
days.  In  1831  it  was  publicly  proclaimed  with  some  exulta- 
tion that  "one  furnace  erected  in  Pennsylvania  in  18.30  will 
in  1831  make  1,100  tons  of  ])ig-iron. "  But,  as  CJeorgo 
Asmus  has  well  said,  "a  time  came  when  men  wore  no 
longer  satisfied  with  these  little  smclting-itots,  into  which  a 
gentle  stream  of  air  was  blown  through  one  nozzle,  which 
received  its  scanty  8uy)])ly  from  a  loather  bag,  squeezed  by 
some  tired  water-wheel."  After  1840  our  blast -furnace  prac- 
tice gradually  improved,  but  it  was  not  until  about  18(15  that 
any  furnace  in  the  country  could  produce  150  ttms  of  pig-iron 
in  a  week.  Ten  years  later,  in  1875, we  had  several  furnaces 
which  could  each  make  700  tons  of  pig-iron  in  a  week;  in 
1880  we  had  several  which  could  each  make  1,000  tons  in  a 


m 


fi* 


fill  It 

5.     flfii   /    .'    ■ 


i i 

1: 

M 

1 

1 

( 

'1 

1 

;!l 

1  1 

1 

444 


ECONOMIC  HI  STORY. 


week ;  and  in  1881  wo  had  one  furnace  which  made  224  tons 
in  a  day,  l,3o7  tons  in  a  week,  and  .^TjOS  tons  in  a  month. 

In  1810,  seventy  years  ago,  wo  prodnced  only  917  tons  of 
steel,  none  of  wliich  was  criicil)le  steel.  In  1831,  fifty  years 
ago,  we  produced  only  al)r)ut  2,000  tons  of  steel,  not  one 
pound  of  which  was  crucible  steel  of  the  best  quality.  So 
imperfect  were  our  attainments  as  stec.'Iniakcrs  in  1831  that 
we  considered  it  a  cause  of  congratulation  that  "American 
«'omp;'lition  had  excluded  the  British  common  blister  steel 
altogether."  In  1880  we  had  virtually  ceased  to  make  even 
the  best  blister  steel,  better  steel  having  taken  its  place  and 
in  that  year  we  produced  1,247,335  gross  tons  of  steel  of  all 
kinds,  04,004  tons  of  which  were  crucible  steel.  Our  produc- 
tion of  IJessemer  steel  and  IJessemer  steel  rails  in  1880  was 
larger  than  that  of  Clreat  Britain. 

It  was  not  until  1844  that  we  commenced  to  roll  any 
other  kind  of  rails  than  strap  rails  for  our  railroads,  and  not 
even  in  that  year  were  we  prepared  to  roll  a  single  ton  of  T 
rails.  In  1880  we  rolled  l,30r),212  gross  tons  of  rails,  nearly 
two  thinis  of  which  were  steel  rails,  and  nearly  all  of  which 
were  T  rails. 

The  growth  of  the  iron  and  steel  industries  of  the  United 
States  during  the  present  century  is  perhaps  best  exemplified 
in  the  statistics  of  the  production  of  our  blast-furnaces  at 
various  periods.  In  1810  W(!  produced  53,908  gro.ss  tons  of 
])ig-irun  and  cast-iron;  in  1840  we  i)rodueed  315,000  gross 
tons;  in  1800  we  produced  821,223  gross  tons;  and  in  1880 
we  produced  3,835,191  gross  tons.  Our  production  in  1881 
will  be  about  4,500,000  gross  tons. 

The  position  of  the  United  States  among  iron  and  steel 
producing  countries  in  1880  is  correctly  indicated  in  the  fol- 
lowing tal)le  of  the  world's  production  of  pig-iron  and  steel 
of  all  kinds,  which  wc  liavc  compiled  from  the  latest  and 
most  reliable  statistics  that  are  accessible.  This  table  jdaces 
the  world's  |>roduction  of  pig-iron  in  1880  at  17,088,59(5 
gross  tons,  and  the  world's  production  of  steel  in  the  same 
year  at  4,343,719  gross  tons.  The  percentage  of  pig-iron 
produced  by  the  United  States  was  nearly  22,  and  its  per- 
centage of  steel  was  nearly  29. 


:t^V 


THE  IRON  AND  STKEL  INDUSTRIES. 


445 


1  to  roll  any 
roads,  and  not 
iin<»;lo  ton  of  T 
)f  rails,  nearly 
y  all  ol'  which 


iron  and  stool 
itod  in  the  fol- 
iron  and  stool 
the  latest  and 
his  taldo  jdacos 

at  ii,cm,rM) 

cl  in  the  same 
ijrc  of  pis-iron 
12,  and  its  per- 


3 


a 


5    ^    8   :$    S   ^ 

CO        C7        O        ^        O        ^ 


O        I-        to        00 

—        -»"        I-        I-  . 

•t"      n     I-     w      i"     >-> 


cl         M         I- 


CO      e 


I 


II 


o 

a* 


CO        " 


IT     £• 


I 


3 


I 


5"   8    S" 


■M 

C3 


'?r 


S 


CI      •:< 

CO        tl 


c'l    S    Ss    8 


a 


3> 


o 


I-        CO        C^        i-l 


CO 


o>  —  r- 
-»<  >o  3> 
■:<     <5     —. 


3* 


a 

2 
'C 

*^ 

2: 
o 


2 

M 
•O 


CO 


s 

at 
M 


-3 

a 

I 

3 

a 


B 


*       cio 


S      B 

3       at 


u 

c 

g 


B 
3 

n 


bp 

5 
S 

•3 
a 
a 

•c 

« 

3 


3 


a 

3 

o 
u 
u 


n 

T 


I- 

'i 


I 


a 


i 


lis 


I 


o 


440 


ECONOMIC  HIS  TOR  V. 


^.H 


I' I' J 


AKlioiif^li  this  country  cannot  produce  iron  and  8toel  as 
clu'iiply  as  Kiiropraii  countries  which  poHscHs  the  udvantii^cH 
of  ciicap  hilior  and  proximity  of  raw  nuitcrials,  it  is  not  ex- 
cel h'd  l»y  aay  other  country  in  the  skill  which  it  displays  or 
the  nieelianical  an<l  seientilic  ccononiies  which  it  practises  in 
any  braneii  of  their  manufacture,  while  in  certain  leading 
branches  it  has  displayed  superior  skill  and  shown  superior 
aptitude  for  economical  improvements.  Our  blast-furnace 
practice  is  the  best  in  the  world,  and  it  is  so  chiefly  beeauso 
we  use  powerfid  bIowin<^-en<riiu's  and  the  best  hot-blast  stoves, 
possess  pMKl  fuel,  and  carefully  select  our  ores.  The  excel- 
lent (juality  of  our  pig-iron  is  universally  conceded.  Our 
Bessemer  steel  practice  is  also  the  Ix-st  in  the  world.  We 
produce  much  more  Hessemcr  steel  aiul  roll  more  Hessemer 
Bte(d  rails  in  a  yiven  time  by  a  fijiven  amount  of  machinery,  ' 
technically  tcruu-d  a  "plant,"  than  any  of  our  KurojK'an 
rivals.  No  controversy  concerninjjj  the  relative  wearing 
(jualities  of  European  and  Auu'rican  steel  rails  now  exists, 
and  no  controversy  concerning  the  (juality  of  Anu-rican  IJcs- 
Bcmer  steel  ever  has  existed.  We  experience  no  dillicully  in 
the  manufacture  of  open-hearth  steel  in  Ihe  Siemens-Martin 
furnace,  and  our  steel  which  is  thus  jiroduced  is  rapidly  com- 
ing into  general  use  side  by  side  with  crucil)le  steel.  In 
the  manufacture  of  crui-ible  steel  our  achieveuu'nts  are  in 
the  highest  degree  '•reditable.  In  only  one  res|)ect  can  it  be 
said  that  in  its  nuuiufacture  we  fall  l.'ehind  any  other  conn- 
try;  we  have  not  paid  that  attention  to  the  manufacture  of 
fine  cutlery  steel  which  (treat  Britain  has  done.  This  is, 
however,  owing  to  commercial  and  not  to  mechanical  reasons. 
Auu'rican  crucible  steel  is  now  used,  without  prejuilice,  in 
the  manufacture  of  all  kinds  of  tools,  and  in  the  manufacture 
of  carriage-springs  and  many  other  articles  for  which  the  best 
kinds  of  steel  are  recjuired.  In  the  quantity  of  open-hearth 
and  crucible  steel  produced  in  a  given  time  by  a  given  i)lant, 
we  are  certainly  abreast  of  all  rivals.  The  largest  crucible 
steel-works  in  the  world  are  those  of  Park,  Brother,  &  Co., 
at  Pittsburg,  Penn.  Our  rolling-mill  practice  is  fully  ecpial 
to  the  best  in  Europe,  except  in  the  rolling  of  heavy  armor 


Vi  i\ 


THE  IRON  AND  STEEL  INDUSTlilES. 


447 


|iliitc8,  for  which  tlioiT  has  been  but  little  demand,  and  in 
the  production  ol"  wliich  we  have,  couHCt  uently,  had  but  little 
experience.  The  <iuality  of  our  rolled  iron,  indudinjr  bar- 
iron,  plate-iron,  Hheet-iron,  iron  hoo|)H,  and  iron  railH,  is 
iniilornily  Huperior  to  that  of  foreign  rolled  iron,  in  the 
production  of  heavy  lorgings  and  castingrt,  a.s  well  aH  all 
lighter  products  of  the  foundry  and  niacin iu,'-shop,  thirt  coun- 
try hart  shown  all  the  skill  of  the  most  advanced  iron-working 
countries  in  Kuro|K'.  In  the  production  of  steel  castings  wo 
have  exhibited  creditable!  skill  and  enterprise,  and  we  an;  in 
advance;  of  all  countries  in  the  regular  use  of  the  Bessemer 
converter  for  this  purpose. 

All  of  our  leading  iron  and  steel  works,  and  indeed,  very 
many  small  works,  are  now  supplied  with  systematic  chemi- 
cal investigations  by  their  own  chemists,  who  are  often  men 
of  eminence  in  their  profession.  The  managers  of  our  blast- 
furnaces, rolling-mills,  and  steel-works  are  themselves  fre- 
(pu'ntly  well-educated  chemists,  metallurgists,  geologists,  or 
mechanical  engineers,  and,  sometimes,  all  of  those  coml)incd. 
Our  rapid  progress  in  increasing  our  production  of  iron  and 
steel  is  not  merely  the  result  of  good  fortune  or  the  possession 
of  unlimited  natural  resources,  but  is  largely  due  to  the  pos- 
session of  accurate  technical  knowledge  by  our  iron-masters, 
and  by  those  who  are  in  charge  of  their  works,  combined 
with  the  characteristic  American  dash  which  all  the  world 
has  learned  to  respect  and  admire.  The  "rule  of  thumb" 
no  longer  governs  the  operations  of  the  iron  and  steel  works 
of  this  country. 

A  feature  of  our  iron  and  stool  industries  which  has  at- 
tended their  marvellous  pro.hictivonoss  in  late  years  is  the 
aggregatitm  of  a  nund)er  of  large  producing  establishments 
in  districts,  or,  "centres,"  in  lieu  of  the  earlier  practice  of 
erecting  small  furnaces  and  forges  wherever  suflicient  water- 
j)ower,  inm  ore,  and  charcoal  ciaild  bo  obtained.  This  ten- 
dency to  concentration  is,  it  is  true,  not  confined  to  our  iron 
and  steel  industries,  but  it  is  to-day  one  of  the  most  powerful 
elements  that  inthienco  their  development.  It  had  its  begin- 
ning with  the  commencement  of  our  distinctive  rolling-mill 


m 


~  t\ 


» -u 


-ma 


448 


ECONOMIC  HISTORY. 


era,  about  1830.  In  colonial  days  and  long  after  the  Revo- 
lution our  iron-making  and  stcel-raaking  establishments  be- 
longed to  the  class  of  manufacturing  enterprises  descriljcd  by 
Zachariah  Allen,  in  his  "Science  of  Mechanics,"  in  1829. 
"  The  manufacturing  operations  in  the  United  States  arc  all 
carried  on  in  little  hamlets,  which  often  appear  to  spring  up 
in  the  bosom  of  some  forest,  gathered  around  the  Mj'terfall 
that  serves  to  turn  the  mill-wheel.  These  villages  are  scat- 
tered over  a  vast  extent  of  country,  from  Indiana  to  the 
Atlantic,  and  from  Maine  to  North  Carolina,  instead  of  being 
collected  togetl>er,  as  they  are  in  England,  in  great  manu- 
facturing districts."  While  these  i)rimitive  and  pieturescpie, 
but  improductive,  methodic  could  no.  forever  continue,  it  is 
greatly  to  be  regretted  that  our  manufactures  of  iron  and 
steel  and  other  staple  products  could  not  have  grown  to  tiieir 
present  useful  and  necessary  proportions  unattendcid  by  the 
evils  which  usually  accompany  the  collection  of  large  manu- 
facturing populations  in  small  areas. 

Upon  the  future  prospects  of  iron  and  steel  industries  it  is 
unnecessary  for  us  to  dwell.  Our  resources  for  the  increased 
production  of  iron  and  steel  for  an  iniU'llnite  jjcriod  are 
ample,  and  all  other  essential  conditions  of  contituied  growth 
arc  within  our  grasp.  We  arc  to-day  the  second  iron-nuxk- 
ing  and  steel-making  country  in  the  world.  In  a  little  while 
we  shall  sur])ass  even  Great  IJritain  in  the  |)r()(luction  of  steel 
of  all  kinds,  as  we  have  already  surpassi-d  her  in  the  pro- 
duction of  Bessemer  steel  and  in  the  consiinipf  ion  of  all  iron 
and  steel  products.  The  year  18S2  will  proimhly  witness  this 
consummation.  We  are  destined  also  t<»  n;iss  (Jrcat  Mritain 
in  the  production  of  jug-iron.  These  conditions  and  results 
arc  certainly  gratifying  to  our  national  pride,  for,  ol  them- 
selves, they  assure  the  ultimate  jtre-eminence  of  the  Unitcil 
States  among  all  civilized  countries.  If  h  be  true,  as  rccoi-ded 
in  the  second  chapter  of  Daniel,  that"  iron  lircaketh  in  pieces 
and  subdueth  all  things,"  the  country  which  produces  ami 
consume )  the  most  iron  and  steel  nuist  hold  the  first  rank. 
When  the  United  States  takes  the  jiositiou  which  it  is  des- 
tined soon  to  take,  as  the  leading  iron  and  steel  producing 


THE  IRON  AND  STEEL  INDUSTRIES. 


449 


ns 


well  ns  consuming  country,  the  saying  of  Hishop  Berkeley, 
that  "Westward  the  course  of  empire  takes  its  way,"  will 
receive  a  new  interpretation;  for  the  iron  industry,  which 
had  its  begimiing  in  Asia,  and  then  passed  successively  to 
the  countries  along  the  Mediterranean,  upon  the  Rhine,  and 
in  the  north  of  Europe,  will  then  have  made  the  circuit  of 
the  world. 


iBii 


SB 


460 


ECONOMIC  HISTORY. 


XVI. 


LES  DETTES  PUBLIQUES, 


FuoM  Neymarck'b  Lk8  DKTTEa  PtnuQiKH  Klkui-eennes,  pp.  86-102. 


I.  — AUGMENTATION .DES   DETTES   I'UBLIQUES   DEPUIS   1870. 

"P^ANS  cette  longuc  <;num<5r}ition  dc  chiffros,  cc  qui  frai)pc 
-■— ^tout  (l'til)orcl  Teaprit,  c'est  rauirmcntatioii  cousidc^rablo 
fit!  lu  dette  pul)li(pi('  dcs  Etals  Eiintpc'oiis  depiiis  18^0.  Octto 
dettc  s'olevait  i\  TA  milliard.s  on  lISTO  onvirun  ;  I'lle  attcint 
llf)  inillia  .Is  en  1880.  L'auj^mcntatiun  n'ost  pas  nioiiidro 
do  40  milliards.' 

Nous  ovons  pris  i\  dcssein  cotto  date  do  1870  qui  nous 
rappcllc  It-  j)ius  grands  niallieurs  (pic  notro  pays  ait  janmis 
supportds,  Ics  lourdos  charges  qui  ont  dt(5  la  cons<^<pience  do 

'  D'lipri'R  lo  joiiriml  (If  la  "  Socii-td  di-  Btutixtiijiii' "  (avi-il,  1807),  la  dettc 
I)iil)li(|iU'  iI'FMiropc  s'cli'vait,  en  1H65-180(J,  aux  cliiftros  suivaiiti :  — 

I)  ppiim>ii  toliiU'K  ill's  tiiiiliti'tn  ...         1(1  iiiilUiirJ.i  r>Of  milliona. 

("iiliilallwitinn  .!.•»  iWnv»  Wl        "         013         " 

IiiU'ret  et  BUiortiHHeiiieiit    .     .         .     ,      2        "         438        " 

La  population  di>  TEurope  tftait  cvaluo'  h  201,7:18,371)  liakiitants;  la  di-ttc  par 
lialiitaiit  rt'prc'si'ntait  'I'lfi  fr.  ;iO. 

M.  I'aul  Hditciiii,  (larm  son  article  sur  1(>  biidKct  jjc'nt'ral  dc  I'Elat,  insert^  dans 
lo  Dictioniiairo  dcx  finances  dv  M.  I.t'on  Say,  a  rc'uni  lou*  Ic  titre  de  -  "  liudgvtii 
Eiiropi'cdH  "  la  ]>liipart  dcM  hiidKcta  du  continent,  ct  pour  en  faciliter  Tc'tudis  il 
a  pliii('  en  retfard  dii  nioiitant  dcs  dc'peniieR  [.nviu':*  pour  Tcxereice  1886,  le 
niiintant  den  detten  consolidccH  ct  aiitrct  (pii  jrri'vciit  I'actif  dcs  difTiTciits  Etats 
ainxi  (pic  le  nmntant  des*  dcpenHeit  inililaircM  ct  cellos  du  service  de  la  Dette  ut 
de  raini)rtis»enient.     11  olitient  le»  cliitTrct  «uivanl8  :  — 

l'ri'Tlii|iin!<  tnenlir  <|)>ii  (li'iicnM'i  liiiilirrtniiVK  nnniii>ll<>ii         IH  niillUrilii  848  milliona. 
('n|<itJiliMilinii  lied  iIkIU'k  (■cinnolliliH'H,  ilt'ii  Uc'tiw  MiKirli*- 

fatili'H.  sniKilii'M  illTpruM,  pto  KW        "         431        " 

Ili>|i<'iiM>ii  ilii  siTTlri' (It-.H  lii'iipK  pt  ill' ritiiinrtlnwiiieiil  4        "         HiW        " 

Di-pcnwn  luilitaire*,  guprri'  vt  marine  ....  .4        "         48!)       " 

On  pourra  comparer  ces  ctiiffres  h  ceux  que  nous  donnons  plus  loin. 


NE8,  PP.  86-102. 

DEl'UIS   1870. 

,  cc  (jui  frappc 
c()iisi(l^ral)lc 
k  1870.  Cottc 
ello  atteint 
;  pas  inoindru 


870  qui   nous 

ays  ait  jamais 

on.s<^(luunco  da 

•i-il,  1807),  ladette 

ntt  — 

).<  r<OH  milliona 

013       " 

438        " 

tants ;  In  dettc  par 

VpAnt,  ing('n<dnn8 
itri'  do  •  "  liudKi'tit 
faciliter  rctiidi',  il 
IVxiTciti"  1885,  If 
k's  (lifTiTciiti*  (^.Ints 
vice  di'  la  Dutte  et 

In  H48  mlllioni. 

431 

HIVI         " 
43!l         " 

plus  loin. 


LES  DETTES  PUBLIQUES.  451 

la  guerre,  le  fardeau  qui  })dse  sur  nous  tous.  La  guerro  dc 
1870  a  cuutd  ^  la  France  plus  de  10  milliards;  sans  clle  nous 
no  serious  pas  grcvii .  d'inipots  ccrasants,  et  aucun  pouple  no 
supportcrait  plus  facilemcnt  quo  nous  le  poids  de  sa  dettc 
publiquc. 

Aucun  pays  n'a,  on  effet,  subi  dcs  d<?sastres  aussi  grands 
que  les  notres ;  aucun  n'a  eu  une  iudemnitd  de  5  milliards  i\ 
payer  li  retraugor;  aucun  n'a  dii  reconstitucr  sa  puissance 
militairo,  son  luateriel  de  guerre ;  aucun  n'a  eu  i^  refaire,  pour 
aiusi  dire,  la  patrio  elle-mC'inc  tout  entiere.  Et  cependant  (juo 
voyons-nous  ?  A  I'e.xception  de  I'Angleterro  (jui,  par  suite 
do  divers  reinboursenionts  d'annuites,  a  pu  diiuiuuer  sa  detto 
de  1,350  millions  ;  i\  r<'xct'p(ion  du  Daneinarck  (|ui,i)ar  suite  dc 
conversions  houreusoincnt  elTectuees,  a  pu  reduire  sa  dettc 
de  20  millions,  tous  les  pays  se  sont  endettes  depiiis  1870 
dans  dos  proportions  ^'normes.  Voici  sur  ce  point  <[uelques 
chilTri's  precis.  Nous  rangeons  les  Etats  par  ordre  d'aceroisse- 
ment  do  leurs  dottos  depuis  1870. 

AUGMKNTATION   DU  CAI'ITAL  NO.MINAL   DK   I'LUSIKUKb 
DETTKS  PUBLIQUES   DEl'UIS   1870. 

Franco 12  inilliardg. 

Kiissiu' 11 

rrussu 3        •'  217  millions. 

Italio 8        "  132 

Hoiiurie 2        "  240        " 

Autricho 1        "  770        " 

Ks|ianne 1        "  ;iOO        " 

IU'IkIiiiio 1        "  80 

Houiiianio 701        " 

AlliiiiaKiie 526        " 

Saxe 888 

(Jri'co 270 

SiTl.ie   ...         244 

Wiirti'inberg I'.l4        " 

Wu.'-ili' 181         " 

Ilaiul)(iiir){ 24         " 

Fiiilande 20        " 

Cotte  augmentation  du  capital  nominal  dos  dottos  pwbliriuos 
ourop<^enne8  (jui  atteint,  dopuis  1870,  40  milliards  environ, 

'  Auijinontation  depuis  1806. 


,1     ! 


452 


ECONOMIC  HISTORY. 


a  eu  pour  consdcjueucc  ruugmentatiou  des  int^rets  ct  dcs 
amortisscmeuts  anuuols  pour  Ics  enipruuts  contractus,  I'ac- 
croisaemcut  dos  dupcnses  totales  dcs  budgets,  uno  surcharge 
dans  Ics  iniputs.  Coiubicn  nc  scrions-nous  pas  all(:'g<>s  si 
nous  n'aviuus  pas  a  payer  cha(iuc  annee  les  luurds  impots  qui 
grevcnt  notrc  coiumerce  ct  Motrc  Industrie,  ct  qui,  s'ajoutant 
aux  frais  do  production,  out  rendu  la  concurrence  a  nos 
produits  d'autant  plus  facile  ?  Toutes  proportions  garddcs, 
ics  pays  d'Kurope  soull'iCnt,  counnc  nous,  de  ccs  lourdcs 
charges  qui,  dans  tons  les  pays,  oberent  les  contribuablcs. 
Cost  la  guerre,  toujours  la  guerre,  (pii  redoit  aux  budgets. 
Dcpuis  seize  ans,  les  budgets  de  la  guerre  et  de  la  marine  out 
coiltd  a  la  France  plus  de  11  milliards,  c'est-a-dire  plus  dc  700 
millions  par  an;  rAllemagne  et  la  Kussic  n'ont  pas  ddpcnsd 
moins  de  10  millards,  chacun  pendant  la  meme  p^riode, 
I'Autriche  et  rilalie  presfjue  Ic  menie  cliilVix'.  Voila  done 
cinq  grands  pays  qui,  en  vue  d'lMic  guerre  prjijiil>le,deitcnsent 
tous  \va  uiis  dc  500  a  900  nnllions,  depuis  seize  ans.  Que 
coutcrait  done  la  guerre  elle-meme  ? 

Les  Etats  curo|»<;ens  paient  annuellement  pour  lours  d^jpcnses 
do  la  guerre  et  de  la  marine  a  pen  pres  les  nienics  .sonnnes  que 
pour  riutdrei  et  ramortis',emeut  de  leurs  dettes.  D'apres  les 
dernicrs  budgets,  ainsi  que  le  {)rouvcnt  les  chiffrcs  ()Tic  nous 
publions  plus  loin,  la  guerre  et  la  marine  content  h  I'Kuropc 
4  milliards  528  miliioiis,  rilors  epic  Tinterr-t  et  ramorti.s.senu'iit 
dcs  dettes  publitpu's  reclament  5  milliards  843  millions.  En 
voici  Ic  relevd  :  — 


ii'  I 


k 


LES  DETTES  PUBLIQUES. 


453 


II.  — DfePENSES   DE  LA  GUERUE,  DE  LA  MARINE,  CAPITAL 
NOMINAL   ET  INT£K^TS   DES  DETTES. 


Etata. 

Bzercioea  financiers. 

Oipitnl 

nominal  de 

Itt  Uutto. 

InWrSti 

et  uniort. 

ami. 

D^pensos 

aun. 
Uuerre  et 
marine. 

l'rii9«o 

Alli'mas?iie 

Autriclie 

Iloiigrie 

WiirtenibtTg  .... 
Sii.xe 

ler  avril,  1880    .     . 
81  ili'ocnibro,  1880  . 
31  ili'cenibre,  1884  . 
;?•  (litembre,  1884  . 
31  lieeenibre,  1885  . 
31  doccnibrc,  1885  . 
31  di'cuinbre,  1883  . 

Milllnrdii. 
Milliuna. 

4.814 

520 

0.288 

3.178 

525 

800 

178 

1.700 

53 

2(J8 

11.131 

345 

151 

274 

2.200 

1.771 

6.042 

2.821 

17.820 

32 

244 

720 

348 

2.622 

*66" 
18.028 
31.000 

Mllllonii. 
220     ) 
20.1  \ 
380.0  1 
200.8  j 
21.6 
33.2 
8.7 
61.1 
2.1 
11 
632 
16.4 
0 

12.4 

60.5 

80.6 

274.1 

89.3 

737.5 

1.8 

13.7 

50.2 

33 

55.4 

2.1 

6.9 

1.038 

1.330 

HllUoni. 
639.1 
842 

Bavii're 

IJaile 

Etats  allenmnds .     .     . 
Italie 

ler  avril,  1880     .     . 
31  d.'cenibre,  1885  . 
31  di'cenibre,  1885  . 
31  di'Vcnibre.  1885  . 

342  5 

Suoile 

Norwfcge 

Dancniark      .... 

31  ili'i.'onibrc,  1885  . 

30  juin,  1885  .     .     . 

31  d.'cenibrc,  1885  . 
31  ili'combrc,  1885  . 

35.5 
18,3 
23 

60  5 

31  di'cenibro.  1885  . 

45  6 

Eiipiignu 

Portugal 

Anfjic'liTrc '    .... 

Snis.se 

Si  rbio 

Uuuinanie 

Grbcf 

Turquio 

Bulgarie 

Kinliinilo 

ler  juiilet,  1880  .     . 
ler  juilii'f.  1880  .     . 
31  mars,  1885      .     . 
ler  jiinvler,  1886     . 
13  juin,  1880  .     ,     . 
ler  avril,  1887     .     . 
ler  Janvier,  1880      . 
1880-lHHl  .... 
ler  Janvier,  1885     . 
31  tlt'cembre    18S5 

200.3 
30.:{ 

740.2 
17.1 
10.2 
28.5 
23 

200 

6.1 

082.4 
850.5 

Kussic 

France  

31  decenibre,  1885  . 
31  decinibre,  1886  . 

Totau.x 

117.112 

5.343.2 

4  5281 

Dans  (luoUea  proportions  dnonnos  Ics  dcttos  publiciuos  de 
toute  rKiirope  no  |)ourraiiMit-olle.s  pas  C'tre  r()duites  si  Ics 
(it'pon.><(\s  d(>  la  L^'ioiTo  ii'.ilisorl)niciit  pas  tons  los  nii.s  plus  do 
H")*}^  dc;  CCS  nirinos  dcttcs  ''.  Toulcs  Ics  puissances  curo- 
pocnncs  ont  dos  cinhanas  linancicrs  ;  tontcs  on  presqnc  toutcs 
auiruiontcnt  on  out  brsuin  d'auirnicntcr  Icnra  impots.  Toutos, 
sans    o.xcoption,   li>nt    des   anuemonts    con.sidi'ral)los.     Ccttc 

'  D'apn-s  une  note  cle  I'lionnrnMe  M.  Hnnnonjick,  tie  la  Sneietr  ile  stutislique 
lie  I,onilre«,  ile  flu  inam,  1884,  ii  lir  mars  I ■'85,  1  Angleterre  paie  eiininie  intr'ret 
22,000,000  JL'.  et  7,000,00»t  X  cciiiiu    .Miorti-Minent,  soit  au  total  20,500,000  Ji. 


i 


'M 


il  '  '* 

f''''Tj.,  '" 

ml 

f(i!i'f  \ii 

wLL\'ri'i 

454 


ECONOMIC  HISTORY. 


situation  prdscnto  les  plus  graves  dangers  et  plus  quo  jamais 
cupendunt,  le  niaintien  do  la  paix  est  ndcessairc  k  1' Europe 
pour  consolider  son  credit,  aiu<iliorer  lY'tat  ''  ses  finances, 
donnei-  de  I'essor  et  du  la  confiancc  au  commerce  ct  a 
I'industrie. 

III. -LES    CONVERSIONS   DE    RENTES    A   L  feXRANGER    ET    EN 

FRANCE. 

Et  cependant,  nialgr^  los  charges  de  toute  nature  qui  pi^scnt 
sur  les  Etats,  les  rentes  de  ces  menies  pays  se  sont  n<''goci<;es 
pendant  Taun^-e  1886  {)res(|ue  toutes  aux  jilus  liauts  cours 
(ju'ellcs  aient  cotds  depuis  1870.  Nun  seulenicut,  grace  a 
I'abundance  des  capKau.v  ct  ii  Tahaisscment  du  taii.x  de 
rint(''ret,  les  fonds  puljlies  out  hauss<^,  niais  il  a  6t6  rdalis^i, 
en  niatirre  de  liuances,  des  progres  consid^^rahles. 

Les  Etats,  ni»ii  plus  que  les  villos  ct  les  soeieles  industricllcs 
on  liuaiicieres,  n"li<^sitent  pas  a  elTefituer,  sur  une  tres  largo 
^t'licllo,  lies  (>p(^rati(»ns  ipi'on  cut  a  jieine  os<5  coneevoir  il  y  a 
moins  de  trente  ans. 

Aujourd'liui  des  Etats,  dont  la  puissance  financi^ro  a  toiijours 
{>i6.  relativomout  restreinte,  ])euvent  contracter  des  eniprunts 
qui  depassfiit  de  lieaiieoup  eeux  (pie  nagu«^re  encore  des 
nations  ricln-s  n'eusseut  tent(''s  (pravce  apprehension. 

Toutes  les  conihinaisons  auxcpielies  pouvent  prefer  les  fi- 
iianers  d'Ktat  <pii  etaient  si  longtenips  restees  dans  le  donuune 
de  la  tlu'orie,  sunt  pleinenient  enlrrcs  dans  la  pratique  et  se 
n'aliscnt  courainnicnt.  Hicn  des  prejugrs  ('eontuuiqucs  et 
linauficrs  se  son!  dissiprs  ;  l»ien  des  priui'ipes,  encore  conlestes 
nagut're,  out  trionqtlie  et  so  sont  inqtoses. 

liC  cn'dit  a  acfpiis  une  forc(>  d'e.xpansion  inouie ;  les  fonds 
puldies,  Ifs  valiMirs  niohilit-'res  se  sont  de  plus  en  pUis  n'pan- 
(liit's,  vulL'nrisi'cs,  dt'nioeratisces  en  fpiel(|Ui'  sorte.  licur 
urantio  facilifc  di^  circidation,  leur  moltiliti'.  h'lir  difl'usion, 
Iciir  accessiltilitr  a  toutes  les  fortimes,  petites  on  grandes,  leur 
out  assurt'-  iiuc  t'avcur  qui'  Ton  p<Mit  trouvtM"  e.veessive,  niais 
(|ui  est,  ;\  divers  points  de  vue,  trcs  iiistifit'e.  Cct  essor  de  la 
fortune  niol)ilien'  a  iietermine  une  \''rital)le  r<^volntiitn  dans 
les  condition>  tinancien's  de  Texistenef  des  peuples. 


LES  DETTES  PUBLIQUES. 


455 


IGEU    ET    EN 


Emprunts,  unifications  dc  dcttcs,  conversions,  sont  dcs 
operations  dcvcnucs  fuiuiliurcs  mume  aux  moindres  Etats. 
Et,  cIjohc  asscz  etrangc,  c'cst  la  France  qui,  apres  avoir  dtd, 
avcc  rAnglotcrrc,  Tinitiatrico  dcs  grandes  rdformes  finan- 
ciercs,  a  (ttd  dcpuis  quclciucs  anndes,  parmi  les  nations,  la  plus 
timido  ti  rdaliser  les  combinaisons  licurcuses,  legitimes,  profi- 
tiiblcs,  (pie  la  puissance  ct  la  soliditd  do  son  crddit  lui  rendcnt 
si  facilcs. 

Rien,  en  cffct,  dc  plus  curieux  ^  observer,  autour  dc  nous, 
que  les  nonibreuses  operations  ilc  conversion  ddji\  accomi»lics 
avec  succL's  on  en  voie  dc  prd[)aration.  Si  on  pout  reprocher 
i\  certains  Etats  uno  propcnsiitn  trop  grandc  ii  cmpruntcr,  il 
faut  bicn  reconnaitro  qu'ils  se  preoccupent  aussi,  pour  la 
l)lupart,  do  n'eniprunter  qu'au  plus  bas  prix  possible.  Dfis 
(pic  leur  cr<?dit  s'iitend  ct  8'ain(?liorc,  ils  s'efforccnt  dc  rem- 
placcr  les  ancienncs  dcttcs  coutcuscs,  on(5rcusci!:,  par  dcs 
dcttcs  plus  Icl-gcres,  contract(;es  a  un  taux  moins  (jlevd.  Ce 
sont  maintcnant  dcs  puissances  financ'^rcs  de  second  ct  dc 
troisienie  oniro  qui  nos  donnent  rcxemplc.  Pans  cct  ordre 
d'id<5c8  ct  do  faits, il  n'est  cortiiincment  pas  inutile  d'oxaniiner 
comment  sc  sont  elYcctuees  les  conversions  reccntes  ct  d'in- 
diquer  Ifs  divers  procedes  jusqii'ici  cujployds. 

Dcpuis  1870,  deux  fonds  d'Etats  frantjais  ont  dtd  I'objet 
d'unc  conversion  :  remprunt  Morgan,  ct  la  rente  5%.  On  se 
rappclle  comment  clles  s'effectuorcnt :  on  offrit  aux  portcurs 
d'obligations  Morgan  0'/^,  Ic  mcmc  rcvcnu  en  route  3%, 
moyeniKuit  une  soulte  de  12-4  fr.  par  obligation.  Los  portcurs 
de  rentes  5%  curent  i\  opter  entrc  Ic  rcmboursement  }\  100  fr. 
de  lours  rent's  et  lYeiiangc  centre  un  nouvcau  titrc  de 
rente  4^%  non-convertible  avant  un  ddlai  de  10  ans  qui 
expire  en  1893. 

La  IJelgitiue  a  opdrd  trois  conversions:  son  4^,  est  devcnu 
(111  4%,  puis  du  ;^%.  Pour  la  premiere  operation,  elle  cut 
iiumediiitement  recours  a  un  syndicat  dc  banquiers,  qui  sc 
obariroait  du  placomont  de  la  rente  uouvello,  tandis  que  I'Etat 
oporait  le  retrait  de  la  rente  convertie.  I'our  la  seconde  con- 
version, le  gouvcrncmcnt  beige  voulut  opi'rcr  soul  et  eniettre 
dircctcment  sa  rente  nouvelle;  il  n'obtini  pas  tout  le  succes 


'"f;..^ 


mm 


456 


ECONOMIC  HISTORY. 


ddsird  ct  dut,  aprHs  dcs  cssals  pcu  favorablcs,  accepter  le 
concours  qui  lui  avait  6t6  donnd  prdcddcmincnt. 

Tout  ruccmmont,  ainsi  qu'on  I'a  vu  dans  Ic  cours  do  ccttc 
<jtudt.>,  la  JJclg'uiuc  a  rdalisd  unc  troisicime  conversion  en  con- 
vertissant  ses  rentes  4%  coutrc  du  31%.  Cettc  op^lnition, 
efl'ectudo  directemcnt  par  le  Trdsor,  obtint  un  plcin  success. 

La  Suede  a,  ellc  aussi,  transform^  successivcment  son  4A  en 
4%  et  en  3),%  en  recourant  il  rinterni<;diairc  des  grandos 
maisons  de  bancjue.  Cellcs-ci  dmettaient  sur  les  march(!s 
(itrangers  la  nouvelle  rente  suddoise,  tandis  quo  1^'tat  restait 
cliarg<5  du  retrait  des  anciens  titres. 

On  con^oit  (jue  rintcrvcntlon  des  syndicats  ct  des  groupcs 
financiers  soit,  pour  aiasi  dire,  Tuniquc  moycn  des  pctits 
Etats  q»ii  n'ont  pas  de  marclid  national.  11  est  certain  (pio  la 
Roumanie,  par  cxemple,  n'a  pu  effcctucr  la  conversion  de  sa 
dette  6%  que  grace  an  concours  de  puissantos  maisous  aux- 
(pielles  ellc  s'est  adressde.  Ce  sontcesderniores  (pii  pla^-aient 
la  nouvelle  rente  tandis  quo  I'l'^tat  remboursait  ranciennc. 

L'Espagno,  lors  de  la  rdcento  conversion  do  ses  oniprunts 
de  I'lle  de  Cuba,  s'est  adrc.s.s('e  a  un  groupo  de  banquiers :  ellc 
s'entendait  avec  eux  pour  Ic  prix  de  la  nouvelle  rente  t\  r.r<;er, 
et  avec  Ic  produit  du  nouvcl  cmprunt  remboursait  des  dettes 
ancicnues  contractdes  h  plus  gros  intdret. 

Les  grands  Etats  qui  ont,  presqnc  tons,  d'importants 
marclids  financiers  no  so  croient  cepondant  pas  toujours 
assez  silrs  de  leurs  projjrcs  forces  pour  dddaigner  lo  concours 
des  banques  et  des  iustitutions  de  crddit.  Sans  cos  hautcs 
influences,  aucuno  operation  do  crddit  importantc  no  pourrait, 
sans  doute,  acqudrir  un  caracterc  international  et  obtcnir  la 
pnrticipation  des  marchds  extdrieurs.  Aussi  toutes  les  con- 
vei'sions  opdrdes  dans  dc  largos  proportions  no  ront-ellos  dtd 
qu'avec  la  j)articipation  des  syndicats. 

La  Ilongric  a  effectud  la  conversion  dc  sa  rente  G%  en  rente 
4%  on  or,  ct  ellc  prdi)aro,  en  cc  moment  memo,  une  opdra- 
tion  du  memo  genre  sur  d'autres  dettes.  lei,  les  banqiiicrs, 
groupds  en  vuo  de  cctto  transformation,  so  sont  cliargds  a  la 
fois  et  du  jdacomont  dc  la  rente  nouvelle  et  du  retrait  de 
la  rente  ancicnne.    Le  remboursement  au  pair  n'est  devenu 


imai 


.M 


LES  DETTES  PUBLIQUES. 


467 


ohligatoire  pour  Ics  portcura  do  G%  liongrois  qu'ii  I'issuc  do 
I'opdration  qui  s'est  effoctuiJo  par  tractions  dchclonndes.  La 
loi,  (jui  a  fixd  los  conditions  dans  lesquollcs  cetto  conversion 
fut  autorisdc,  <itait  con^uc  prcsquc  dans  los  memcs  tonnes  (pic 
Ic  projct  (pic  nous  formulions  noiis-meuK?  dOs  lo  niois  d'aout, 
1876,'  en  vue  do  la  conversion  (fvcntuello  du  6*^  fran(;ais. 

En  Alloniagnc,  Ics  conversions  do  fonds  prussiens,  bavarols, 
ot  wurtenibergcois  se  sont  op<5rdes  par  remission  d'eniprunts 
dont  Ic  produit  a  servi  au  rembourscment  des  anciennes 
rentes. 

A  I'dlranger,  il  nous  rcstc  i\  citer,  au-dcssus  de  tons,  Tcx- 
cmplc  des  Ktats-Unis  (pii  ont  accompli  avec  unc  liabiletd  et  un 
esprit  de  suite  merveilleux  des  conversions  successivcs  dans 
ics  conditions  Ics  plus  heurcuscs  et  les  {)lu8  favorablcs,  sans 
(jue  los  particulicru  aicnt  jamais  cu  a  souffrir  des  con8(5- 
quences  do  cos  fiansformations  r(jp('t{^03.  Grace  i\  la  prdvoy- 
ance  avec  laquelle  rAm(?riquc  du  Nord  avait  cv6C:  scs  rentes 
par  B<5rics,  des  conversions  partiellos  ont  pu  so  8ucc<5dcr 
ra[)idement ;  et  Ton  a  vu  en  pen  d'anni^^^s  du  (5%  se  trans- 
former en  5%,  puis  en  4<^,  i)nis  en  .'5f^.  Cos  op(?ration8 
nombreuses,  Ics  l*;tata-Unis  les  ont  cfl"ectu(-'cs  dircctemcnt  sur 
lours  propres  marcbes  et  il  rcxtdrieur  avec  Ic  concours  do 
graudes  maisons  de  ban(iue. 

Mais,  en  dehors  acs  exemplcs  que  nous  ont  donnds  les 
autrcs  nations,  nous  pourrions  rappelor  ccux  (pic,  sous  des 
formes  diverses,  nous  (mt  efforts  nos  dopartcmcnts  fran(;ais  et 
nos  propres  villes.  Lit  encore,  nous  trouvons  des  efforts  trcis 
louables  et  des  combinaisons  tres  vari<?es.  Nous  avons  vu  des 
villes  recourir  au  rembourscment  au  pair  d'ancionnes  dettes  et 
a  des  emprunts  plus  avantageux  pour  alk'gcr  Icurs  cbarges, 
les  uncs  s'adressant  au  public,  les  autros  s'assurant  I'appui  de 
syndicats,  d'autros  culin  traitant,  sans  autre  intcrmddiairc, 
avec  Ic  Cr<!dit  E'oncier  de  France  (pii  leur  garantissait  \  un 
taux  maximum  les  capitaux  dont  ello  avaicut  besoin  pour 
rembourscr  la  dettcant<5rieurecontract<^e  ii  un  taux  jtlus  ("'lovd. 

Nous  avous  vu  enfin,  plus  pros  de  nous  encore,  Ic  Cr<5dit 
Foncier  dc  Franco  prolitcr,  pour  son  proprc  compte,  et  au 

*  Voir  notre  etude ;  La  Conversion  de  la  Rente  5%.    Paris,  Dcntu,  lidit,  1876. 


Ill 


m 


'**i|| 


f  ! 


u-K 


,w  ■<; 


458 


ECONOMIC  HISTORY. 


i  I 


grand  profit  do  sa  vasto  clicnWlo  d'cmpruntcurs,  do  I'abaissc- 
mcnt  du  prix  do  I'argent,  ct  convcrtir  dos  ol)ligatiou8  cntral- 
nant  uno  annuitd  dlev<!0  i)ar  dt's  litres  n'cxigeant  qiruue 
annuitd  notableincnt  infdrieuro.  On  sait  avoc  (|nclle  simpli- 
cit(j  s'est  elYi!Ctu<5o  cetto  op<jration :  les  porteurs  dcs  obliga- 
tions i\  convcrtir  avaicnt  nn  droit  do  pr(5fdrcncc  dans  la 
souscription  dcs  obligations  nouvoUes  ;  ils  restaicnt  lii)re8  de 
n'cn  pas  user,  inais  dtaient  dumcnt  avcrtis  du  rcmbourscmcnt 
procliain  ct  obligatoire  dcs  titres  ancicns. 

Ainsi  lc9  nations  (pii  nous  cntourcnt  ct,  chez  nous-mcmcrt, 
Ics  provinces,  Ics  villos,  Ics  institutions  dc  crddit,  ont  prati(|U(^ 
avcc  cmpresscmcnt  ct  avcc  succcs,  sons  Ics  formes  Ics  plus 
divcrscs,  dcs  conversions  qui,  toutcs,  ont  6i6  profitablcs.  En 
cc  moment  mcme,  dc  grandes  op<)rations  do  ce  genre  sont  a 
prdvoir.  II  n'cst  pas  doutcux,  en  clYct,  (juc  rAnglctcrrc  nc  so 
prdparc  i\  unc  nouvellc  conversion  dc  scs  Consolidcs  dunt  Ics 
cours  sont  au-dcssus  du  pair;  des  (pic  I'occasion  sera  propice, 
la  transformation  sera  faitc.  En  Italic,  la  conversion  dc  la 
rente  5%  est  ^  I'ordrc  du  jour,  ct  il  nc  s'dcoulcra  pas  bcaucoiiji 
dc  temps  avant  qu'ellc  nc  soit  rdalisdo.  Ddjii  Ic  gouverne- 
mcnt  a  prdj)ar6  un  projet  pour  convcrtir  plusieurs  dcttcs 
rachetablcs  ct  offre  du  4i  a  la  i)lacc  du  Tx^. 

II  est  i^  remaniuer  quo  toutcs  ccs  conversions  dc  rentes,  qui 
ont  diminu(1  I'int^lret  \)ny6  par  les  Etats  i\  Icurs  prctcurs,  n'ont 
nuUcmcnt  diminud  les  charges  dc  ccs  divers  pays.  Pour  ctre 
juste,  d(iuitablc,  toute  conversion  do  rentes  doit  avoir  pour 
cons(;(pience  unc  diminution  d'impots.  11  n'en  a  rien  <jt<?. 
Prenez  tons  les  budgets  des  pays  qui  ont  cffcctu(;  d(?s  conver- 
sions ;  comparcz  les  chiffros  des  deponses  publi(|ueH  et  dos 
impots  j\  ccux  (pii  dtaient  inscrits  avant  ct  nprcs  les  conver- 
sions, vous  trouvcrcz  partout  dcs  augmentations  de  ddpeuscs 
et  d'impots. 

II  faut  rcmarqiicr,  d'autre  part,  que  presquc  toutcs  ccs 
conversions  n'ont  pu  etre  rdalisdcs  avcc  succcs  (|u'autant  que 
la  haute  bampic  est  intcrvenuo  et  leur  a  donnd  son  concours. 
II  convicnt  enfin  de  dire  quo  toutcs  ccs  operations  ont  (-tv 
facilitdcs  par  I'abondancc  toujours  croissanto   dcs   capitaux 


m 


LES  DETTES  PUDUQUES. 


469 


ilisponiblca,  ot  par  la  biiisso  du  taux  do  riutdrct,  consdciuonco 
dc  cottu  abondancu  duH  capitaux. 


■■)!m 


IV.  — ABAISSEMENT  DU  TAUX   DR  LINXfeufcT   HV.   LARGENT 

DEI'UIS    1870. 

Dcpuis  1870,  ct  surtout  depuis  Ic  jour  oii,  pour  la  prcmiiirc 
fois  (Icpuis  la  guerre,  la  rente  6%  fut  cote  au  pair,  e'est-ii-dlrc 
il  100,  Ic  4  8eptt'ml)re,  1874,  de«  cliuugenients  proluiidrt  so  wont 
])rt)duits  sur  les  niarch<>8  fran^ais  et  dtrangerH  dans  Ic  taux  de 
capitalisation.  Successivenient,  d'annoo  on  annee,  lentenient 
(I'abord,  puis  par  <5tapes  vigoureuscuient  francbies,  les  valcum 
do  pieniier  ordrc,  do  preniiorc  suretd,  doscondiront  do  5% 
d'intorot  a  4J%  ;  les  valours  do  second  ordre,  qui  rapp«^rtaiont 
OA,  7,  et  8%,  descendiront  }\  0%  ot  nitMue  au-dossous.  A 
inosurc  (jue  lo  capital  dc  ces  valours  augmontait,  lour  rcvonu 
dovonait  naturellomcnt  nioins  {"lovd. 

Au  lendemain  dc  la  gtUMic,  un  capital  dc  100,000  plac<5  en 
ronfos  0%  aurait  produit  .O.SOO  a  (1.000  fr.  de  routes.  Lo 
nionie  capital,  placd  aujourd'hui  en  rentes  fran^-aisos  3%  pro- 
duirait  si  peine  3.700  francs. 

Hopuia  1870, lo  G<^  Ani<;ricain  ndisparu;  c/)nvortl  d'abord 
en  5%,  puis  en  4*}^,  Icvoilil  maintenant  en  3%  en  attendant 
uno  nouvelle  conversion  en  2A. 

Lo  4A  Holge,  les  fonds  Allonmnds,  tols  quo  les  690  Badols, 
Bavarois,  Wiirtcmbergcois,  etc.,  out,  sur  la  coto,  cede  la  place 
11  dos  litres  de  moindre  rapport,  ^  dcs  rentes  dc  3A  et  do  3"^, 
(|iii  atteignont  Ic  pair. 

Dans  TEurope  entiorc,  lea  rentes  4%  (pii  ont  <?t6  erodes  en 
reniplaceinont  do  rentes  '>%  sont  au  pair  ot  memo  au-dossus, 
ou  ont  etd  dobang^-os  contre  du  ^.^  ou  du  3%. 

Dos  fonds  dtrangers,  exoti(iuos,  comnio  Ton  dit  en  Hourse, 
arrivent  maintenant  au  taux  nioyen  aucpiel  so  n(''gociaient 
anciennonient  de  bons  credits  euro])oens  de  second  ordrc. 
Les  cotes  anglaises  nous  donnent  i\  cot  <?gard,  do  curicux 
c.\eniples. 

11  y  a  dix  ans  sculcmont,  voici,  notammont,  le  7%  Japonais 
(pii  valait  100  fr.  fin  187tl  et  qui  maintenant  vaut  113 ;  ^ 


i 


IMAGE  EVALUATION 
TEST  TARGET  (MT-3) 


1.0 


I.I 


1.25 


m 


ilM  IIM 
llitt  111^ 

NO     nil  2.0 


1.8 


U    11.6 


1 

A" 

O 

PhotDgraphic 

Sciences 
Corporation 


23  WEST  MAIN  STREET 

WEBSTER,  N.Y.  14580 

(716)  872-4503 


,\ 


;v 


^9) 


V 


^^ 


o 


o 


<^^<> 


¥    ^ 


#n 


C/j 


iff  iff 


•>*f 


Uv    ' 


I  III''    ( 


460  ECONOMIC  HISTORY. 

pareillc  date,le  6%  Argeutin  1868,  cot6  aujourd'hui  101  k  102, 
valait  60;  le  5%  Br(;silicn  valait,  fin  1876,87  k  88;  il  est 
maintenant  a  103,  trois  points  au-dessus  du  pair. 

Le  5%  Italien  qui  nc  donne  net  que  434,  valait,  fin  1867,  72 
fr. :  il  6ta\t  dans  ecs  derniers  temps  h  102  fr.  et  meme  au- 
dessus,  c'est-a-dire  20  fr.  plus  cher  que  le  prix  auqucl  nous 
dmettions  en  1871  notre  rente  fran^aise  5%. 

Le  5%  Roumain,  qui  valait  40  fr.  fin  1876,  et  qui  rapportait 
consdquemmcnt  8%,  se  ndgocie  au-dessus  de  90.  On  lvalue 
done  aujourd'hui  le  credit  de  la  Roumanie  a  un  taux  bien 
supdrieur  a  celui  auqucl  notre  proprc  crddit  dtait  estimd  en 
1871  et  1872,  puisfjue,  dans  ces  deux  ann()es,  la  France 
dmettait  ses  rentes  5%  a  82,50  et  84  fr.  50. 

La  I'cnte  Autrichicnne  4<?^  or,  cot(ie  89  h  90  fr.  et  qui,  il  ya 
pen  de  temps,  s'est  n(?gocide  meme  a  96  et  97  fr.,  est  encore 
plus  haut  que  nos  rentes  frangaiscs  en  1871.  La  rente  Hon- 
groise  4*^  or,  a  valu  jusqu'^  88  dans  ces  derniers  mois,  alors 
que  nous  avons  <;mis  du  6%  frangais  5  ct  6  francs  plus  bas. 

Voici,  pour  les  principaux  fonds  d'Etats,  la  difference  des 
cours  cotds  au  31  ddcembrc,  1869,  et  au  31  ddcembre,  1886  :  — 

31dic.,186!>.      31  dec,  1880. 

3%Franvai8 70,05  82,20 

4,34  jMlien 57,30  101,85 

6%Ammcain 84  134         (le  4%). 

4J  Beige 102^  95,40    (le  3%). 

5%  llusse  1862 85  06 

3%  Consolides  anglais 92|  lOlJ 


v.  — MODES   DibMISSION  ET   TYPES   DE   RENTES  EMPLOYES 
PAR  LES  GOUVERNEMENTS  EMPRUNTEURS. 


Nous  venons  de  montrcr  comment  les  conversions  de  rentes 
cffoctudcs  par  les  principaux  Etats  avaient  6t6  rdalisdcs  ct 
comment  la  baisse  du  taux  do  I'interot  et  I'abondance  dos 
capitaux  avaient  facilit<j  ces  op(!rations.  II  n'est  pas  sans 
utilitd  de  faire  remarqucr  aussi  comment  les  divers  pays 
effcctnont  leurs  emprunts.  On  voit,  d'apros  cette  dtude 
comparative  des  dettcs  europ(;onnes,  combien  est  varide  la 
divcrsit(j  des  types  de  rentes  dmiscs.     L'Angleterre  a  du  3%, 


"  ■III 


LES  DETTES  PUBLIQUES. 


461 


ui  101  k  102, 
^  88;  il  est 

,  fin  1867,  72 

et  memo  au- 

auqucl  nous 

qui  rappovtait 
0.  On  <•  value 
un  taux  bien 
ait  cstim<;  cu 
es,  la  France 

r.  et  qui,  il  y  a 
tr.,  est  encore 
La  rente  Hon- 
ers  mois,  alors 
ics  plus  bas. 
diff<3rencc  des 
smbre,  1886 ;  — 


,  1880. 
2,20 
1,85 
4 

5,40 
6 
H 


(le  4%). 
(le  3%). 


ES  EMPLOYES 
EURS. 

rsions  de  rentes 

{•td  r(<alis(3cs  et 

Tabondancc  dos 

n'cst   pas   sans 

cs   divers  pays 

■es    cette   (5tude 

in  est  vari(}C  la 

eterre  a  du  3%, 


du  2^%,  des  aunuit<3S  tcrminables  ;  I'Autriche,  du  4.20%  md- 
talliquc,  du  4%  or,  du  5%  papier,  du  5%  argent,  des  lots  ^ 
primes  sans  int(ircts.  La  Belgique  a  eu  du  4i,  du  4% ,  du  3%. 
La  Russie  a  dmis  des  emprunts  sous  forme  de  rentes  G%,^%, 
4%  ;  la  Hollande  a  des  rentes  3^,  3%,  2i%  ;  I'ltalie  a  du  5%, 
(In  3%,  et  vient  de  d<3crdtcr  du  4i%  ;  la  Norwugc  a  du  4^,  du 
4%,  du  3J%  ;  le  Portugal  a  du  5%  et  du  3%  ;  la  Prusse  a  du  4<>^ 
et  du  3|%;  laRouraanic  adu7%,du  6%,du  5%;  la  Saxe,  du3^ 
et  du  3%  ;  la  Suede,  du  4^%,  du  4%,  du  3i%  ;  le  Wiirtemberg, 
du  4|,  du  4%,  da  3i%,  etc.  Parmi  les  fonds  coloniaux,  noxis 
trouvons  du  5%  de  la  Nouvelle  Zdlande,  du  5%  Qudbec,  du 
6%  Queensland,  du  4|, 4%  et  3|%  des  Indes,  du  4%  du  Canada, 
de  la  Jamaique,  u'  Tasmania,  du  5%,  4^%,  4%  Victoria. 
Quel  enseignement  tirer  de  ces  faits  ?  C'est  qu'on  ne  pent 
dire  d'une  fa^on  absolue,  c'est  qu'il  n'est  pas  scientifiquement 
ni  pratiquement  prouv<j  qu'il  soit  pr(if<;rab'e  pour  un  Etat  do 
n'emprunter  que  sous  un  meme  type  de  rentes,  et  que  la 
diversitd  de  ces  types  de  rentes  pent  nuire  i\  leur  plus-value. 
La  v^ritd  est  qu'il  en  est  des  Etats  comme  des  particulicrs :  Ic 
meilleur  mode  d'emprunt  est  celui  qui  coute  le  moins  cher  et 
procure  la  plus  grande  somme  des  capitaux.  II  peut  etro 
utile  d'emprunter  sous  forme  d' obligations  ou  sous  forme  de 
rentes;  en  4%  ou  en  3%  ;  en  5%  ou  en  4A%.  C'est  une 
question  d'opportunit^  et  d'apprdciation.  Tous  les  gouverne- 
ments  ont  choisi  la  forme  d'emprunt  la  plus  avantageuse  aux 
intdrets  de  tous,  sans  s'astreindre  h  n'dmettre  qu'un  type  de 
rentes  ddtermind  h  I'avance. 

II  en  est  do  meme  pour  le  mode  d'dmission  des  emprunts. 
C'esc  la  France  qui,  lors  de  la  guerre  de  Crimdc,  gdndralisa  le 
systeme  des  souscriptions  publiques.  Avant  1852  les  em- 
prunts d'Etat  dtaient  soumissionnds  par  de  grandes  maisons 
de  banque  qui  pla9aient  ensuite  les  titres  de  rentes  dans 
leur  clientele:  plus  tard,  les  gouvernements  firent  appcl 
directement  aux  capitaux  du  public  sans  se  servir  do 
I'intermddiaire  des  banquiers.  Cepcndant,  des  modifications 
sdrieuses  se  sont  produites  dans  le  systeme  des  souscrip- 
tions. Nous  voyons  I'Anglcterre  pour  ses  emprunts  coloniaux, 
pour  ses  emprunts  de  villes,  effectuer  des  appels  au  crddit 


II 


462 


ECONOMIC  HISTORY. 


n  '     j? 


sous  forme  d'adjudication  publique.  Elle  offre  4%  d'intdret, 
par  exemple  ;  elle  a'cngaj^e  k  servir  d'abord  Ics  demandes  do 
ccux  qui  se  contenteut  d'un  intdret  luoiudre.  Co  systomo 
favorise  Ics  souscriptcurs  les  moins  exigeants,  ne  ddcourage 
pas  Ic  public  par  des  mdcomptes  imm6rit<js  c\  la  repartition  et 
pcnnet  a  I'cmpruntcur  d'obtouir  les  conditions  les  plus  favor- 
ables;  ce  genre  de  souscription  rend  les  emprunts  moins 
ondreux  pour  les  cmprunteurs.  Les  autres  modes  d'cmprunts 
employes  par  les  gouvcrncraents  sont  des  ventes  fermos  ou  a 
option  k  des  banquiers  et  a  des  dtablissemcnts  dc  crddit. 
Plusieurs  Etats  se  sont  born<Js  h  charger  des  maisons  de 
bauque  dY-mcttre  les  emprunts  qu'ils  desiraient  effectuer, 
moyennant  unc  commission.  A  Texccption  de  I'Angleterre 
et  de  la  France,  presque  tons  les  gouvcrncments  europdens 
traitcnt  encore  avec  des  syndicats  de  banquiers  pour  leurs 
Amissions. 


lis     '' 


VI.  — DE  LA  REPARTITION   DES    FONDS    PUBLICS  STRANGERS 
DANS  LES   PORTEFEUILLES  FllANgAIS. 

Dans  le  cours  de  cette  dtude,  nous  avons  essayd  de  connaftre 
le  montant  approximatif  des  valeurs  dtrangeres  appartcnant 
k  nos  nationaux.  Les  chiffres  que  nous  avons  citds  nous 
ont  6t6  donhds  par  les  ministres  des  finances  et  les  directcurs 
de  statistiquc  des  gouvernements  dtrangers ;  mais  ils  auraient 
besoin  d'etre  compldtds,  et  aucune  autoritd  ne  pourrait  mieux 
que  notre  conseil  supdrieur  do  statistique  obtenir  et  grouper 
des  indications  plus  nombrcnscs  sur  co  sujct  important. 

A  de  rares  exceptions  pres,  et  sauf  des  circonstances  particu- 
lieres  tellcs  que  la  hausse  ou  la  baissc  du  prix  du  change  sur 
<ics  valours  internationales,  les  capitalistes  fran^ais  qui  pos- 
sbdent  des  valeurs  dtrangorcs  ne  font  pas  recevoir  le  montant 
de  leurs  coupons  d'int<;ret  il  r<;tranger :  ils  s'adressent  a  des 
banquiers  et  des  dtablisscments  de  crddit  frangais,  pour 
encaisser  leurs  coupons  dcluis. 

Nous  sommes  convaincus  que  MM.  de  Rothschild,  la  Banque 
de  Paris,  la  Soci(5td  Gdndrale,  le  Coniptoir  d'Escompte,  le 
Cr<3dit  Lyonnais,  le  Crddit  industriel  et  tons  les  banquiers  — 


i  >* 


LES  DETTES  PUBLIQUES. 


463 


qui  paient  une  patente  spdciale  comme  effectuant  des  paie- 
mcnts  de  coupons  strangers,  —  r^poudraient  sans  difficult^s  ^ 
un  questionnaire  que  le  Conseil  8up<iricur  de  statistique  leur 
adresscrait. 

Ce  n'cst  pas  par  simple  curiositd  que  des  documents 
scmblablcs  auraient  besoin  d'etre  mis  au  jour.  Les  questions 
financiercs  et  fiscales  doiveut,  plus  que  jamais,  prendre  le  pas 
snr  les  questions  politiques.  Or,  ce  que  nos  l<;gislateurs  et  la 
plupart  de  nos  hommes  politiques  connaissent  le  moins,  c'cst 
I'exacte  situation  de  la  fortune  publique  de  la  France,  le 
montant  et  la  puissance  de  son  dpargne,  la  nature  et  le  chiffre 
de  ses  placements  soit  sur  des  valours  fran^aises,  soit  sur  des 
valeurs  ^trangeres.  C'est  h.  ce  d^faut  de  connaissances  qu'il 
faut  attribuer,  pour  beaucoup,  les  erreurs  fiscales  (jconoraiques 
et  financieres  qui  ont  ^td  commises  dans  I'dtablissement, 
Taugmentation  et  la  suppression  de  tel  ou  tel  impot  de 
pr<!ference  ^  tel  ou  tel  autre.  A  une  dpoque  ou  11  est  ques- 
tion d'impot  sur  les  rentes,  d'impot  sur  les  valeurs  dtrangeres 
appartenant  ^  des  Frantjais,  d'impOt  sur  le  re.  jnu,  etc.,  ces 
renseigneraents  sont  indispensables  si  Ton  veut  dviter  de  dan- 
gereuses  erreurs.  Le  Conseil  supdrieur  ne  doit  pas  hdsiterj  a 
notre  avis,  S.  faire  la  lumiere  sur  ces  questions  spdciales  :  c'est 
du  c8te  des  statistiques  financifires,  nous  ne  saurions  trop  in- 
sister  surce  point,  que  doivent  porter  les  efforts  et  les  travaux 
des  hommes  dminents  qui  font  partic  de  la  Commission. 


VII.  — DE  LA  COTE  ET   DE  LA  NI^GOCIATION  DES   RENTES 
FRANgAISES  AUX  BOURSES   liTRANG^RES. 

Nous  devons  aussi  signaler  une  rdforme  que  nous  avons 
bien  souvent  rdclamde  et  qui  paraitra  sans  doute  utile  i\ 
obtenir  quand  on  se  sera  rendu  cumpte  de  I'importance  des 
emprunts  Strangers  contractus  en  France.  A  I'exccption  des 
fonds  allcmands,  tous  les  fonds  d'Etat  strangers,  toutes  les 
])rincipales  valeurs  dtrangeres  sont  cotds  h,  notre  bourse;  tous 
Ics  gouvernements  Strangers  ont  fait  appel  aux  capitaux  fran- 
qais.  Or,  aucune  de  nos  rentes  fran^aiscs  n'est  cotde  ni  c\  Vi- 
enne,  ni  &,  Saint-Pdtersbourg,  ni  ^  Stockolm,  ni  h.  Christiania, 


111' 


■.-  I 


i,:  ! 


f  ll 

H^^^^^H 

'  nH 

U':                       h 

Hi 


464 


ECONOMIC  HISTORY. 


ni  i\  Rome,  ni  ^  Florence,  ni  k  Madrid,  ni  h  Lisbonne,  ni  k  Ath- 
encs.  Notre  3%  est  cotd  ^  Londres,  I3ruxelle8,ct  Amsterdam. 
Et  c'est  tout.     Cette  situation  mdrito  qu'on  y  porte  attention. 

L'afiluencc  des  fonds  d'Etat  Strangers  sur  Ic  marchd 
fran^ais,  la  facility  avcc  laquellc  ils  s'y  placent  et  s'y  nego- 
cient,  sont  des  faits  financiers  qui  rdvelent  uno  tendance  des 
capitaux  centre  laquello  il  serait  peut-etro  b.  la  fois  tres 
diflicile  de  tenter  uno  reaction  soudaino  et  violente. 

11  est  certainement  regrettable  que  nos  nationaux  deviennent 
les  creanciers  d'Etats  dont  la  solvabilit()  et  le  crddit  sont 
douteux.  11  est  non  moins  facheux  qu'aux  capitaux  lente- 
ment  formds  par  Ics  hommes  d'dpargne  de  notre  pays  se  sub- 
stituent  des  titres  strangers  ddpourvus  de  garantie  sdrieuse. 

Mais,  d' autre  part,  il  ne  saurait  etre  mauvais  et  il  est  meme 
ndcessaire  et  utile,  au  point  de  vue  financier  et  dconomique, 
que  les  nations  honnetes  et  notoirement  solvablcs  soient 
ddbitrices  de  la  notre.  11  ne  saurait  etre  mauvais  qu'a  un 
moment  donnd  il  y  ait  entrc  les  mains  descapitalistes  fran^ais 
une  certaine  quantity  de  bon  papier  (jtranger,  bicn  et  dumcnt 
garanti,  et  facilement  r(;alisable. 

On  couQoit  cependant  qu'il  y  a  un  certain  <3quilibrc  financier 
international  que  ne  saurait  etre  rompu  sans  inconvenient.  On 
conceit  le  pdril  qu'il  y  aurait  pour  la  France  a  ne  compter  au 
dehors  que  des  ddbiteurs  et  point  do  crdanciers,  k  toujours 
absorber  le  papier  et  ne  jamais  en  cdder,  a  so  saturer  de 
valeurs  dtrangercs  tandis  qu'elle  ne  placcrait  point  dans  les 
autres  pays  une  quantity  a  pcu  pres  dquivalente  de  valeurs 
fran^aises.  On  pent  enfin  mesui'er  le  danger  que  notre  pays 
pourrait  courir  le  jour  ou  les  nations  qui  nous  entourent 
gagneraient  plus  h  notre  mine  qu'a  notre  prospdrit(3.  Memo 
au  point  de  vue  politique,  ces  considdrations  ne  sont  pas  sans 
consistance. 

Politiquement,  aussi  bien  quo  financierement,  il  est  done 
sage  et  ddsirable  d'intdresser  I'Europe  h  nos  progres,  a  notre 
ddveloppement  national,  k  notre  avenir  dconomique. 

Un  des  moyens  les  p'.is  eflicaces  d'atteindre  ce  but  est  de 
placer  parmi  les  capitalistes  dtrangers  la  plus  grande  quantity 
possible  de  rentes  et  de  valeurs  fran^aises. 


1-. 


LES  DETTES  PUBLIQUES. 


465 


b,  il  est  done 


Maia,  dira-t-on,  cette  expansion  dcs  titres  fran^ais  a'optjrera 
naturcllcnicnt,  grace  ^  la  eonfiance  si  grandc  que  le  credit  dc 
la  France  inspire  aux  autres  peuplcs.  Si  bien  qu'il  n'y  aurait 
(pfcl  laisscr  I'aire  au  temjjs,  aux  capitaiix  Strangers  et  a  la 
sagcsse  dcs  nations  pour  assurer  uu  rcsultat  si  souhaitable 
pour  notre  avcnir. 

Cc  raisonncment  est  d'une  logique  exccllente,  et  pent  pa- 
nutre  trcs  solidcmont  fondd  en  tli(;orie.  11  est  absolumunt 
vain,  s'il  n'cst  pas  justilic  par  la  pratique.  Or,  il  no  Test 
mallieurcuscnient  pas. 

Ce  n'cst  pas  tout  de  dire  aux  autres  nations  :  "  Moi,  France, 
j'cmets  de  la  rente,  offrant  toutes  garanties,  plcine  scriurite. 
Prcnez-la  ;  il  n'y  a  ricn  de  mcilleur.  Vou.s  connaissez  ma 
ricliessc,  ma  puissance  de  production,  mon  amour  du  travail, 
nia  probitd  rcconnne.  Vous  savez  que  j'ai  toujours  pay(i  et 
bien  payd  ;  vous  savez  combien,  menie  dans  les  circonstances 
les  plus  critiques,  j'ai  dte  ponctuelle  a  remplir  mes  engage- 
ments. Prenez  de  ma  rente  !  Quels  meilleurs  titres  avez- 
vous  chez  vous  ?  Quels  meilleurs  placements  ?  Quel  emploi 
plus  productif  et  plus  sur?" 

Un  tel  discours  n'aurait  ricn  que  de  juste  ct  d'exact.  Tout 
le  monde  est  pdnetrd  de  ccs  v(;rites  et  nous  n'aurions  h,  precher 
que  dcs  convertis. 

Mais,  pour  quo  Totrangcr  prenne  beaucoup  de  nos  fonds 
d'Etat,  encore  faut-il  qu'il  sache  ou  allcr  les  prendre,  ou  aller 
les  achetcr,  et  meme  ou  aller  les  vendrc,  le  besoin  <jcli(5ant.  II 
faut  les  rcndre  accessibles  a  tons  les  capitalistes  de  I'Europe, 
et  ndgociables  facilement  partout. 

Or,  e'est  ce  dont  on  ne  nous  parait  pas  s'ctre  suffisamment 
occupd. 

Comme  nous  I'avons  dit  plus  haut,  nos  rentes  franqaisos  ne 
sont  pas  cotdes  aux  bourses  dtrangorcs.  Dans  ccs  dernieres 
anndes,  de  grands  emprunts  ont  dte  effectuds  chcz  nous  notam- 
mcnt  en  rente  3%  amortissable.  On  pent  dire  qu'i\  riieure 
ou  nous  sommos,  cette  rente  est  presque  inconnue  sur  les 
grandes  places  financieres  de  I'Europe.  II  y  a  li\  unc  faute 
commise,  une  grave  ndgligcnce  qu'il  taut  se  hater  dc  rdparer. 
On  doit  faire  pour  nos  rentes  ce  que  les  autres  nations  font 

30 


466 


ECONOMIC  HISTORY. 


Wi  \ 


m  \ 


pour  Icurs  funds  d'liltat  qii'clles  prcnnent  taut  do  soin  do  nous 
fciii'c  connaitro  et  auqucls  ellcs  ouvrcnt  acces  sur  tous  les 
grands  marches  europdons. 

VIII.  — GUEllllE,  RUINE,  OU  k6 VOLUTION  INDUSTRIELLE  ET 

i;CONOMIQUE. 

Mais  cc  qui,  h.  notrc  avis,  rcssort  jusqu'^  I'dvidcnce  du  tra- 
vail auqucl  nous  nous  sommcs  livrds,  c'cst  que  I'Europc 
cntiere,  avec  lo  poids  de  sos  d(5pcnse8  militaires,  avcc  la  sur- 
charge dcs  dettes  i)ubliques  ct  d'imputs  qui  I'dcrascnt,  marchc, 
si  ellc  persevere  dans  cctto  voie,  ^  la  guerre,  a  la  ruinc,  a  unc 
v^jritablc  revolution  industriellc  ct  (3conomique.  Quel  que 
soit  le  pessimisme  d'unc  telle  conclusion,  nous  ne  pouvons 
taire  nos  impressions.  La  paix  de  I'Europe  n'est,  h,  vrai  dire, 
qu'un  (jtat  de  guerre  latent,  et  cette  situation  qui  semblc  la 
condition  ordinaire  du  vieux  continent  pese  de  deux  manieres 
sur  le  mondc  civilisd :  elle  lui  enleve,  d'une  pai't,  une  bonne 
partie  des  capitaux  constitues  par  I'dpargne  annuelle,  par  le 
travail  de  tous,  pour  cntretcnir  dcs  soldats,  acheter  des  fusils, 
des  canons,  des  munitions,  construire  des  fortercsscs,  des 
navires  ;  d'autre  part,  elle  rcmpeclie  de  se  servir  de  ces  capi- 
taux unormes  pour  d<3velopper  le  commerce,  I'industrie,  le 
matdriel  de  la  production,  diminucr  les  frais  g^iu^raux  de  la 
nation.  L'apprdhcnsion  et  les  pr^^j.aratifs  de  guerre  devicnnent 
aussi  nuisibles  et  aussi  couteux  que  la  guerre  cUe-memc.  Les 
finances  do  I'Europe  sont  tellcmcnt  obdrdes  qu'on  pent  craindre 
qu'ellcs  ne  coiiduisent  fatalement  les  gouvernements  a  se  de- 
mandcr  si  la  guerre,  avec  ses  dventualitds  terribles,  ne  doit 
pas  gtre  prdfdrde  au  maintien  d'unc  paix  prdcaire  et  couteuse. 
Si  ce  n'cst  point  ^  la  guerre  que  doivcnt  aboutir  les  prdpara- 
tifs  militaires  et  les  armements  do  I'Europe,  ce  pourrait  bien 
etre,  ainsi  que  le  disait,  il  y  a  vingt  ans,  lord  Stanley,  k  "  la 
banqueroute  des  Etats."  Si  ce  n'est  ni  ^  la  guerre  ni  h,  la 
ruinc  que  doivent  conduirc  de  semblables  folies,  c'cst  assurd- 
ment  &,  une  revolution  industriellc  et  dconomiquc. 

La  vieille  Europe  lutto  contre  la  concurrence  de  pays  jcunes, 
riches,  produisant  ^  meilleur    compte.    II  est,  au-delEb  de 


LEli  DETTES  PUBLIQUES. 


467 


TRIELLE  ET 


rOcdan,  uno  rdpubliquc  puissantc,  rAmdrique,  qui  a  su 
eteindre  unc  dcttc  que  Ics  ndcessitds  d'unc  <?rtindo  cause  lui 
avaiont  fait  coutracter  ;  cllc  offre  au  mondc  entier  le  8j)CctacIo 
d'unc  prospdritd  sans  excmplo.  Tout  rdcounuont,  Ic  message 
du  prdsident  Cleveland  i\  rouvcrture  du  CongrOs  a  traduit  Ic 
sentiment  d'un  vdritablc  cmbarras  de  richcsses.  En  Asie, 
tous  Ics  pcuples  commenccnt  k  profiter  des  ddcouvertes  et  des 
progres  quo  I'Europe  a  accomplis,  ct  comme  dans  ces  pays  le 
prix  de  la  niain-d'ceuvre  ct  les  charges  publiques  sont  presquc 
nuls,  I'Europe  cutiere  dprouvera  chaiiue  anndo,  de  plus  en 
plus,  Ics  effets  do  I'apparition  sur  la  scene  commerciale  et 
industi'ielle,  de  tous  ces  i)eaples  qui  n'ont  j)as  ^  payer,  tous  Ics 
ans,  ni  quatre  milliards  ct  derai  pour  les  ddpenses  de  la  guerre, 
ni  plus  de  cinq  milliards  pour  les  intdrets  dc  Icurs  dettes 
publiques. 

Le  mardchal  de  Moltko  disait  rdccmment  au  Reichstag 
"  qu'a  la  longue  les  pcuples  ne  pourront  plus  supporter  les 
charges  militaii'cs."  II  aurait  pu  ajouter  que  le  jour  oii  les 
pcuples  se  rendront  compte  de  tout  ce  (pic  Icur  coute  la  guerre, 
mome  lorsqu'ellc  demeure  ^  I'dtat  de  simple  risque,  lorsqu'ils 
considdreront  la  masse  croissante  d'intdrets  que  le  progres 
jettc  chaque  jour  du  cOtd  de  la  paix,  les  gouvcrnds  sauront  ce 
jour-la  dieter  lenrs  volontds  a  leurs  gouvernants.  Les  41 
milliards  d'augmentation  des  dettes  publiques  de  I'Europe, 
depuis  1870,  mis  en  regard  des  milliards  de  diminution  de  la 
dette  de  I'Amdrique  offrent  un  puissant  enseigncmcnt.  Non, 
les  pcuples  ne  pourront  plus  h,  la  longue  supporter  dc  tels 
fardcaux  ;  non,  ils  ne  pourront  plus  continuur  a  travailler,  ii 
peincr,  a  souffrir,  ^  dlevcr  pdniblement  leurs  families  pour 
(jue  leurs  biens,  Ijurs  ressources,  leurs  dpargnes,  les  ctrcs  qui 
Icurs  sont  chers,  soicnt  sacrifids  et  ddtruits  i)ar  la  guerre  dans 
des  luttes  gigantcsqucs.  lis  vculcnt  la  paix,  profiter  des 
bicnfaits  qu'elle  procure,  dchanger  paisiblement  leurs  produits, 
comraerccr,  travailler ;  ils  vculcnt  tous  unc  administration 
dconome,  des  diminutions  d'impots. 

A  CCS  ddsirs,  les  gouvernemcnts  rdpondent  on  augmentant 
tous  Ics  ans  les  charges  militaircs,  les  prdparatifs  de  guerre, 
Ics  charges  publiques.   ' 


I  V 


1. 


408 


ECONOMl  C  HIS  TOR  Y. 


Lc8  pcuplcs  finirout  par  se  lassor  du  maintien  d'un  tel  dtat 
dc  choscs  qui  nous  ramouo  atix  temps  baibarcs :  la  civilisation 
qui  a  abattu  Ics  barriercs  cntrc  Ics  pays  et  Ics  individus,  rendu 
Ics  conuniications  jilus  rapidcs  ct  plus  faciles,  dtabli  dcs 
chemius  do  for  ct  dcs  routes,  crcusc  dcs  canaux,  pcrcd  des 
uiontagnca  et  des  isthmes,  imposcra  la  paix  aux  socidtds 
modcrncs  d'uuc  I'uqon  aussi  irresistible  que  la  guerre  s'im- 
posait  aux  sauvagcs  et  aux  societds  ancieuncs.  —  Janvier, 
1887. 


:'f' 


t 


J/' 


■   f 

I'.  I  > 


if 


M;Hii 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


469 


XVII. 

THE  WORLD'S  PROGRESS  IN  TRADE  AND 
INDUSTRY. 


FuoM    XKUMANN-SpAi.LAnr'fl     "  Ueiiersiciiten    der     WELTwinxn- 

SCIIAFT,"  '  TKANsr.ATEI)*  IV  THE  "  JoUKNAL  OF  THE  STATISTICAL 

Society,"    Vol.  XLV.  ri'.  82-111. 

THE  latter  i)art  of  the  present  century  liaa  witnessed 
many  changes  in  the  economic  and  industrial  condi- 
tions of  the  majority  of  the  civilized  countries  of  the  world. 
Industries,  arts,  and  manufactures  have  accjiiired  a  remark- 
aljle  dcvelojiment ;  the  more  striking  Avhen  avc  consider  how 
rapidly  the  change  has  been  effected.  The  i)rogre8S  made  by 
individual  States  is  easily  traced  by  thoir  degree  of  refinement 
and  a  study  of  their  statistics;  and  from  these  it  will  be  seen 
how  quickly  this  transformation  advances.  Little  less  than 
a  century  ago  the  industries  of  certain  countries  and  States 
were  isolated  and  estranged ;  at  the  present  time  they  are  to 
a  great  extent  united.  It  is  not  so  long  since  that  burden- 
some restraints  Avere  placed  upon  internal  intercourse  by 
reason  of  ]nono|)olies  which  were  in  the  hands  of  guilds  and 
corporations.  Li  addition  to  this,  staple  rights  and  traffic 
rights,  privileges  which  were  granted  to  certain  townships, 
had  also  the  effect  of  restricting  the  progress  of  national, 
and  in  a  far  greater  degree  of  individual,  industries  and 
trades.  In  some  of  the  central  European  countries  this  state 
of  affairs  continued  until  very  recently,  and  even  when  the 
horizon  gradually  began  to  widen  among  some  of  the  more 
erdightened  nations,  this  isolation  still  continued,  though 
with  n  extended  boundaries.     It  was,  however,  not  so  much 

1  Jahrgang,  1880,  Stuttgart.    Julius  Maier,  1881. 

2  The  edition  of  the  "  Uebcrsichten "  for  1887  has  necessitated  a  number 
of  changes  in  this  translation.  —  B.  R. 


470 


ECONOMIC  III  STORY. 


ail  isolation  of  town  from  town  as  province  from  province, 
and  many  Kiirojican  count rics  formed  the  type  of  a  narrow 
niimled  policy  of  seclusion  in  their  economic  life.  It  was 
only  during  the  decade  from  1JS70  to  18H()  that  those  admin- 
istrative reforms  wen;  introduced  whieh  had  the  effect  of 
causing  the  whole  State  to  Ix;  recognized  as  a  unit  in  respect 
of  economii!  (pieslions  alTecting  the  entire  populatitm.  Soon 
after  this  important  epoch  in  tlie  history  of  economic  pro- 
gress, people  hecamc  more  sensible  of  the  pressing  n(>e(l  that 
existed  of  freeing  commerce  throughout  the  huid  from  the 
burdensome  restraints  which  had  hitherto  fettereil  it.  As 
soon  as  the  political  horizon  began  to  clear,  the  Cierman  States 
banded  together  and  formed  the  Zollvcrein.  CJreat  Britain 
then  proceeded  to  al»olish  protective  tarilTs;  the  continental 
States  also,  after  a  little  time,  reduced  the  existing  high 
duties,  repealed  the  guild  and  corporation  laws,  which  until 
then  had  so  jiaralyzed  trade,  and  endeavored  to  ent(!r  into  a 
species  of  jiolitical  trades  nnion  with  each  other.  It  was 
not  hmg  before  the  Eurojjean  CJovernments,  following  the 
example  set  them  by  England  and  I'^-ance  in  18(50,  concluded 
a  series  of  international  conunercial  treaties,  l»y  which  they 
reciprocally  guaranteed  to  each  otlier  "most  favored"  treat- 
ment; and  the  snbse(pient  modifications  of  the  treaties  thus 
contracted  in  the  period  18(50-(»8  wei-e  generally  in  a  favor- 
able direction,  and  tended  to  minimize  the  domain  of  cus- 
toms' exclusion. 

After  the  expiration  of  the  treaty-period  in  1877  we  enter 
again  upon  a  time  of  economic  retrogression.  The  treaties 
during  later  years  were  not  collectively  renewed,  and  although 
in  some  cases  t^ic  duties  ha<l  been  raised,  yet  there  was  no 
actual  return  to  the  old  system  of  restrictive  and  i)rohibitive 
tariffs.  The  force  of  circumstances  imperatively  demands  that 
commercial  relations  shonld  remain  tmdistnrbed,  and  not  suf- 
fer from  restraints  placed  upon  free  importation  into  the  re- 
spective coimtries.  In  connection  with  the  close  economic 
combinations  of  all  civilized  nations,  there  has  in  our  time 
been  an  increasing  effort  to  attain  a  similarity  of  conditions 
Avith  reference  to  industry,  justice,  and  administration.    The 


pRoannss  ix  tiiade  and  industry. 


471 


unity  <»r  the  inuHt  eomplox  Stiito  relationships  depends  on  the 
(M)nt('nts  of  numerous  economic  treiities.  At  first  in  f»ermany, 
and  afterward  in  certain  other  European  States,  railroail  or- 
ji^nnizations  were  formed.  Hy  means  of  these  enterprises 
goods  and  personal  projierty  were  transported  throuirhout  the 
whole  len<>;th  and  i>readth  tjf  the  land.  Even  in  a  far  ^'reater 
decree  than  railways,  have  the  postal  and  telejj;raphie  systems 
been  the  means  of  unitinir  not  only  the  iState  l)ut  the  entire 
world,  and  of  mal<inir  people  of  all  nations  neiuhltors  in  spite 
of  disianee.  Tiie  world's  postal  union,  which  extends  neaidy 
1,:]00,000  Sijuare  miles,  and  unites  approximately  7(!<)  mil- 
lions of  peo})le,  is  one  of  the  hajjpiest  results  of  the  develop- 
nii-nt  of  commercial  industries.  In  the  same  way,  in  IHii'), 
tlio  first  steps  were  taken  to  establish  an  international  tele- 
grajihic  union,  and  the  results  in  18S0  went  far  to  prove  that 
this  union  had  been  the  means  of  breakinfj;  down  the  barriers 
of  international  commercial  intercourse.  Railway  c(m- 
grcsses,  assemblies  of  a  thorouu;hly  cosmopolitan  character, 
the  postal  c<inii;reas,  and  the  international  teleijraphie  confer- 
ence,—  all  enjoying  otlicial  authority, —  have  been  the  means 
of  extending  still  further  commercial  relations.  What  they 
accom])lish  in  the  region  of  intellectual  and  material  culture 
is  recorded  in  golden  characters  in  the  history  of  the  world. 
They  have  proved,  in  a  far  greater  degree  than  was  antici- 
pated, the  means  of  promoting  still  furthci*  advancement  in 
the  economic  conditions  of  the  world.  To  them  we  owe  the 
unity  of  the  weights  and  measures  on  the  basis  of  the  metri- 
cal system,  the  international  system  of  goods  transjjortation, 
and  the  adoption  by  entire  groups  of  States  of  the  same 
monetary  standard,  of  which  we  have  an  exami)le,  first,  in 
the  Austro-German  monetary  c(mference,  then  in  tlie  con- 
ference of  18(55,  known  as  the  Great  Latin  Conference,  and 
lastly  in  the  Scandinavian  monetary  union.  The  adoption 
of  a  complete  international  system  of  weights  and  measures 
is  a  question  the  settlement  of  which  cannot  be  long  de- 
ferred; the  only  point  ujion  which  controversy  is  likely  to 
arise  is  the  settlement  of  the  basis  which  is  to  be  taken. 
There  has  already  been  established  a  similarity  in  the  inter- 


V-  1 


r;  hi 


472 


ECONOMIC  HISTORY. 


national  laws  of  banking  and  exchange.  This  has  been  the 
means  of  affordinp^  greater  security  for  the  protection  of  in- 
ternational rights,  and  given  also  an  impetus  to  the  distri- 
bution of  capital.  As  may  be  easily  credited,  at  no  period 
of  the  world's  history  has  there  been  a  time  when  the  rapid 
circulation  of  capital  between  one  nation  and  another  has 
been  more  easily  and  expeditiously  effected  than  at  present. 
The  movement  of  milliards  now  occasions  no  surprise,  and  it 
is  pei'fectly  consistent  that  in  the  case  of  English  or  French 
capital  which  circulate?,  in  Austria,  Germany,  Russia, 
Egypt,  or  in  South  America,  or  Asiatic  countries,  any  ex- 
cess or  deficiency  may  be  provided  for  by  credit  drawn  on 
Europe,  in  America,  or  India.  Thus  in  the  same  way  all 
commercial  enterprises  combine  to  assist  in  the  development 
of  cosmopolitan  economy, —  railways,  posts,  and  telegraphs 
being  the  outward  sign  of  this  union.  With  these  goes  hand 
in  hand  the  division  of  labor  which  conveys  the  production 
of  the  masses  to  its  proper  place  in  the  world.  With  the 
ever-increasing  masses,  the  necessity  of  the  world's  produc- 
tion being  considerably  extended  becomes  a  matter  of  the 
first  importance,  and  there  are  now  no  barriers  sufficiently 
strono:  to  resist  this  universal  demand.  Administrative  in- 
stitutions  must  be  so  adapted  that  this  century's  legislation 
may  be  fixed  on  a  firm  and  lasting  basis. 

International  relations  have  had  the  effect  of  creating  a  new 
order  of  life,  in  which  the  industries  of  individual  States, 
without  detriment  to  their  independence  or  individuality, 
must  perform  their  share  of  the  functions  of  the  whole,  of 
which  they  constitute  a  unit.  The  part  then  which  in  the 
world's  economy  is  taken  by  individual  States  is  of  the 
greatest  value ;  and  though  the  present  economic  conditions 
of  the  world  are  not  yet  fully  developed,  they  are  sufficiently 
advanced  to  enable  us  to  form  an  idea  of  their  ultimate  im- 
portance. Wonderful  progress  has  been  already  made,  and 
even  if  it  be  found  that  the  improvements  which  have  so  far 
manifested  themselves  in  these  economic  conditions  will  not 
be  further  advanced  by  the  present  generation,  still  there  can 
be  no  question  as  to  the  excellent  results  of  which  they  have 


I'l'Vi'.js; 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


473 


already  been  productive.  In  all  parts  of  the  civilized  world 
the  growth  of  capital  has  made  rapid  progress,  and  even 
during  the  commercial  crisis  of  1873,  and  the  consequent 
depression,  this  progress,  though  certainly  interrupted,  was 
not  wholly  checked.  It  again  received  a  powerful  impulse 
in  1880-82,  and  has  by  no  means  come  to  a  standstill  in  the 
relatively  unfavorable  years  1883-85.  Adequate  employment 
for  these  accumulated  millions  has  been  possible  in  large 
economic  undertakings.  Thus,  for  instance,  Avhen  sufficient 
jirofit  was  not  obtainable  in  Europe  by  reason  of  a  fall  in  the 
rates  of  interest,  capital  was  diverted  into  other  channels, 
and  employed  in  foreign  investments  in  far  distant  countries, 
which,  though  remote,  yet  offer  a  fair  field  for  investment. 
In  this  manner  inventions  and  enterprise  have  been  univer- 
sally stimulated. 

All  these  considerations  lead  us  confidently  to  predict  that 
though  there  may  be  interruptions  and  checks  to  the  ever 
increasing  progress  in  the  improvements  of  the  world's 
economic  conditions,  these  interruptions  are  of  a  purely 
temporary  character,  and  must  eventually  be  overcome.  In- 
dustries and  commerce  which  have  advanced  with  such  rapid 
strides,  and  the  vast  amount  of  labor  and  capital  which  have 
been  expended  upon  railroads,  shipping,  telegraphs,  etc., 
have  all  given  an  impetus  to  the  world's  progress,  and  can- 
not fail  to  make  a  lasting  impression  upon  it. 

In  order  thoroughly  to  appreciate  the  changes  which  the 
world's  economic  conditions  have  experienced  under  the  dif- 
ferent natural  political  and  social  influences,  as  well  as  to 
estimate  the  reaction  caused  by  crises,  or  periods  of  specu- 
lation, favorable  or  unfavoral)lc  harvests,  wars,  or  revolu- 
tions, protection  or  free  trade,  an '.  other  important  factors  in 
determining  the  national  prosperity,  it  will  be  necessary  to 
arrange  a  broad  and  comprehensive  system  of  statistics  ex- 
tending over  a  lengthened  period.  Wc  have  to  deal  with 
snch  a  mass  of  complex  individual  elements,  that  only  the 
consideration  of  the  most  important  will  lead  us  to  any  logi- 
cal deduction.  Social  economy,  commercial  policy,  finance, 
changes  of  administration,  as  also  the  specific  influences  of 


bii 


1'    :  ii 


*»:' 


I 


474 


ECONOMIC  HISTORY. 


good  or  bad  years,  must  be  taken  into  account.  In  the  in- 
vestigation of  a  subject  so  complicated  as  the  present,  we 
must  be  satisfied  with  very  crude  information,  and  as  it  is  im- 
possible to  obtain  accurate  and  reliable  data,  we  are  obliged 
to  depend  in  a  very  great  measure  upon  inference  and  deduc- 
tion. As  a  means  of  approximately  estimating  the  extent  of 
increase  or  decrease  in  material  prosperity,  it  is  advisable  to 
take  as  a  basis  for  the  calculation,  the  income-tax  returns, 
affording  as  they  do  a  certain  indication  of  the  position  of 
national  wealth. 

Among  the  nations  which  have  contributed  so  enormously  to 
increase  the  world's  prosperity,  Great  Britain  takes  the  fore- 
most place,  the  growth  of  her  national  capital  having  since  the 
commencement  of  the  present  century  made  very  rapid  strides. 
A  reference  to  the  income-tax  returns  will  show  how  great 
this  annual  increase  has  been.  Mr.  Dudley  Baxter  gives  the 
income  for  the  year  1814-15  as  146  millions  sterling  (accord- 
ing to  the  income-tax  assessments) ;  in  1843  it  amounted  to 
251  millions,  while  in  1865  it  rose  to  396  millions,  and  in 
1875  to  571  millions ;  and  according  to  the  estimates  formed 
by  one  of  the  most  distinguished  statisticians,  Mr.  Robert 
Giffen,  the  national  wealth  of  Great  Britain,  which  in  1865 
amoimted  to  6,113  millions,  rose  in  1875  to  8,548  millions; 
thus  exhibiting  for  the  decennial  period  an  increase  of  2,435 
million  sterling.  Latterly,  on  account  of  the  general  depres- 
sion which  has  prevailed,  the  annual  increase  of  wealth  is 
estimated  only  at  90  millions.  Thus  the  progress  for  the  en- 
tire period  may  be  presented  in  the  following  statements :  — 


Years. 


1800 
1840 
18fi0 
1876 
1880 


Authority. 


Reck  and  Pultcney 
Porter      .... 
Leone  Levi  .     .     . 
Giffen 


National  Wealth. 


£1,800,000,000 

4,000,000,000 

0,000,000,000 

8,550,000,000 

about  9,000,000,000 


And  it  will  be  readily  conceded  that  the  latter  figures  are 
rather  under  than  over  estimated,  when  we  consider  the  fact 
that  the  amount  of  British  capital  invested  in  Government 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


475 


3>    4  ssili 


>  ,  '   T! 


18,  Mr.  Robert 


National  Wealth. 


securities  and  different  companies,  in  railway  and  other  in- 
dustrial enterprises,  is  estimated  by  Mr.  Giffen,  in  his  paper 
on  the  accumulation  of  capital  in  the  United  Kingdom,  at 
2,788  millions,  and  by  the  "Banker's  Magazine"  (March, 
1881)  at  3,465  millions.  According  to  the  income-tax  re- 
turns, the  exempted  incomes  in  1845  were  at  the  rate  of  £7, 
in  1855  £11,  and  in  1875  <£17  per  head.  According  to  the 
most  recent  calculations  (1884),  however,  the  amount  is  esti- 
mated at  about  .£36  per  head  of  the  community.  Tliese 
figures  will  show  at  what  an  extraordinary  rate  the  wealth 
of  the  country  is  increasing,  and  we  may  repeat  that  the 
estimates  are  rather  below  than  above  the  mark. 

As  regards  the  progress  of  the  national  wealth  in  France, 
it  appears  from  the  examination  of  the  data  that  the  accumu- 
lation of  capital  has  increased  in  the  period  1848-71  from 
50  to  60  per  cent.  M.  L.  Wolowski  estimated  the  national 
wealth  in  1871  at  150  to  200  milliards  of  francs,  of  which 
120  milliards  consisted  of  property  in  land  and  houses,  so 
that  tliis  latter  description  of  property  has  absorbed  since 
1851  about  20  milliards,  or  yearly  one  milliard  of  francs. 
This  view  of  the  natimial  prosperity  of  France  has  also  been 
taken  by  M.  de  Fovillc,  after  a  critical  examination  of  the 
estimates  formed  by  M.  Block,  S.  Mony,  A.  Amclin,  Vacher, 
and  other  well-known  writers.  He  estimates  the  national 
wealth,  after  the  loss  of  Alsace  and  Lorraine,  at  from  200 
to  216  milliards  of  francs;  these  estimates  arc  also  forti- 
fied by  the  authority  of  Fehler,  who  agrees  in  the  main  with 
De  Fovillo  as  regards  the  increase  in  the  accumulation  of 
wealth,  which  may  be  estimated  at  1,500  millions  of  francs 
yearly. 

There  arc  so  many  insurmountable  difficulties  in  the  way 
of  approximately  estimating  the  increase  in  the  national 
wealth  of  German},  that  a  com|)arative  statement  is  almost 
out  of  the  question.  The  many  political,  administrative,  and 
territorial  changes  which  of  late  years  have  taken  place,  ren- 
der it  almost  impossilile  to  produce  a  comparison  between 
its  present  position  and  that  of  earlier  years ;  an  idea,  how- 
ever, maybe  formed  of  the  great  progress  made  by  this  nation 


f  • 


•  ly- 


ji 


-■ii  i 


476 


ECONOMIC  HISTORY. 


by  a  study  of  the  value  of  the  exports,  which  increased  from 
1,060  million  marks  in  the  year  1850  to  6,554  million  marks 
in  1884.  Another  method  of  arriving  at  an  approximate  idea 
of  the  increase  of  public  wealth  is  to  take  the  amount  of  duties 
levied  on  all  steam  industries.  Dr.  Engel  computes  the  actual 
assessed  capital  in  the  German  Empire  employed  in  these 
industries  at  11,104  million  of  marks.  Dr.  Soetbcer,  in  his 
valuable  work  on  the  extent  and  distribution  of  wealth,  though 
taking  a  somewhat  pessimistic  view  of  the  situation,  states 
that  in  the  kingdom  of  Prussia  alone  during  the  period 
1872-78  —  a  period  of  industrial  stagnation  —  there  was 
found  to  be  a  sensible  increase  in  the  national  wealth,  as 
the  following  table  will  show:  — 


Tears. 


1872 
187a 
1874 
1875 
1876 
1877 
1878 


National  Income, 

Per  Head  of 
Population. 

Marks. 

Marks. 

6,969,000,000 

293 

7,195,000,000 

299 

7,532,000,000 

807 

7,628,000.000 

311 

7,857,000,000 

.316 

7,992,000,000 
8,069,000,000 

315 

323 

As  an  indication  of  the  increase  of  national  income,  if  we 
estimate  it  simply  from  the  "income-tax  assessments,  it  will 
1)0  seen  that  the  tax-paying  income,  which  amor.nted  in  1854 
to  302  million  marks,  rose  in  1878  to  957  millions,  — an  in- 
crease of  300  per  cent.  It  is  evident,  therefore,  from  an 
examination  of  Soctbeer's  that  there  has  been  a  very  consid- 
erable increase  in  the  national  wealth  of  Prussia. 

The  remaining  western  European  countries  also  afford 
valual)le  materials  for  researches  into  the  question  of  the 
growth  of  economic  power.  Thus  in  the  ease  of  Austro- 
Ilungar)',  C.  von  Czoernig,  basing  his  calculations  upon 
various  statistical  returns,  estimates  roughly  the  income 
derivable  from  land,  mining,  and  other  industries  in  1859 
at  about  3,360  million  florins;  an  unofficial  publication 
issued  in   1868  estimates   it  at  4,300  millions  ;    and  the 


mm 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


477 


Per  Head  of 

Population. 

Mnrlu. 

0 

2!t3 

0 

299 

M 

807 

10 

811 

»0 

316 

0 

315 

0 

323 

figures  for  the  year  1874,  taking  the  very  lowest  estimate, 
may  be  reckoned  at  from  5,500  to  6,000  million  florins. 
M.  Falbe  Hansen  is  of  opinion  that  the  national  wealth  of 
Denmark  amounted  in  1873  to  2  million  reichthalers,  and 
M.  Massalski  estimates  that  of  Belgiunx  at  29  milliard 
francs;  and  as  regards  Sweden,  it  appears  from  a  work 
which  has  been  issued  by  an  anonymous  statistician,  who 
has  evidently  devoted  much  care  and  attention  to  the  subject, 
that  its  national  wealth  in  the  year  1876  amounted  to  four 
and  one  half  milliards  kroners,  or  five  milliards  marks. 

Still  more  interesting  than  this  review  of  Europe  is  a  study 
of  the  remarkable  progress  which  has  been  made  in  the  eco- 
nomic conditions  of  the  United  States.  This  country  pos- 
sesses the  data  of  regular  valuations  at  every  census,  and 
from  them  we  find  that  in  1790  the  wealth  of  the  then  three 
millions  of  inhabitants  was  estimated  at  1750,000,000  or  an 
average  of  $187  to  each  person.  The  decennial  increase  since 
that  date  is  shown  in  the  following  table :  — 


Year. 


1700. 
1800. 
1810. 
1820. 
1830  . 
1840. 
1860. 
1860. 
1870. 
1880. 


Population. 


3,929,827 

5,305,037 

7,239,814 

9,638,191 

12,800,020 

17,0(59,453 

23,191,876 

31,500,000 

38,558,000 

60,166,783 


Wealth. 


$750,000,000 

1,072,000,000 

1,500,000,000 

1,882,000,000 

2,058,000,000 

3,704,000,000 

7,136,000,000 

16,159,000.000 

30,009,000,000 

43,042,000,000 


Decennial 

Decennial 

Percentage 

Percentjige 

Increase  of 

Increase  of 

Population. 

Wealth. 

Per  cept. 

Per  cent. 

3502 

43  00 

36-43 

3000 

3313 

25-40 

33-4C 

4100 

3267 

41-70 

85'87 

80-60 

3559 

126-42 

22  00 

86-13 

3000 

4500 

Average 

Property  to 

each 

Person. 


202 
207 
195 
206 
220 
307 
614 
780 
870 


Here  also  the  progress  of  national  wealth,  as  in  England, 
was  very  slow  prior  to  the  year  1840,  after  which  a  much 
more  rapid  increase  was  made.  The  remarkable  difference 
between  the  figures  of  1850  and  1860  is  attributed  in  the 
census-volume  itself  to  an  undervaluation  for  the  year  1850. 
It  is,  however,  affirmed  that  a  sufficient  improvement  in  sta- 
tistical methods  has  taken  place  since  1860  to  permit  of  a 


■■  Si 


•:  m 


l!*  i  i 


478 


ECONOMIC  HISTORY. 


correct  comparison  of  the  figures  of  that  year  with  those  of 
1870  and  1880,  and  to  establish  statistically  a  rapid  growth, 
particularly  in  the  decade  from  18G0  to  1870.  Especially  in 
1880  was  an  exact  and  comprehensive  method  employed  in 
order  to  ensure  the  greatest  possible  accuracy.  The  com- 
parative slowness  in  the  increase  of  wealth  from  1870  to  1880 
is  explained  by  the  census  commissioner  by  two  considera- 
tions. In  the  first  place  the  valuation  in  1870  was  made 
upon  the  basis  of  a  depreciated  currency,  but  in  1880  upon 
a  gold  basis ;  and  in  the  second  place  there  has  been  an  in- 
creasing tendency  of  personal  property  to  escape  assessment. 
In  any  event  the  depression  in  the  years  1874  to  1879  has 
also  exerted  an  appreciable  influence. 

The  aggregate  of  the  national  wfealth  for  1880  is  made  up 
from  the  following  particular  valuations :  — 

itim.  Doll. 

Farms 10,197 

Ilesideuces  and  business  real-estate,  including  water- 
power     9,881 

Railroads  and  equipment 5,536 

Telegraphs,  shipping,  and  canals 419 

Live  stock,  farniing-tools,  and  machinery     ....      2,406 
Household  furniture,  paintings,  jewelry,  books,  etc.  .       5,000 
Mines  and  quarries,  together  with  ^  the  annual  pro- 
duct   781 

Three-quarters  of  the  annual  product  of  agriculture 
and  manufacture  and  of  the  annual  importation  of 

foreign  goods 6,100 

Churches,  schools,  asylums,  public  buildings  .     .      2,000 

Specie 612 

Miscellaneous  items,  including  tools  of  mechanics      .         650 

Total 43,642 

In  this  summary  of  national  wealth,  which  appears  not  to 
have  been  based  upon  the  assessed  valuation  of  property,  as 
that  amounted  only  to  $16,903,000,000,  but  upon  25,000 
replies  to  inquiries  and  upon  numerous  local  estimates,  the 
public  debt  of  the  Union  has  not  been  taken  into  considera- 
tion, although  it  is  chargeable  in  some  manner  to  the  total 
national  wealth  pro  rata  parte  ;  but  allowance  has  been  made 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


479 


for  private  indebtedness,  the  debts  of  the  various  States, 
corporations,  insurance  companies,  mortgages,  etc.  The  cor- 
rectness of  the  data  has,  however,  been  established  with 
greater  accuracy  as  regards  the  details,  and  under  any  cir- 
cumstance we  have  here  to  do  with  one  of  the  most  inter- 
esting direct  valuations  of  modern  times. 

For  the  completion  of  the  foregoing  data  concerning  the 
national  wealth  of  the  United  States  certain  figures  from  the 
annual  reports  of  the  Treasury  Department  will  serve,  as  they 
likewise  tend  to  show  both  the  rapid  increase  of  national 
prosperity  in  recent  years  and  in  particular  the  remarkable 
lluctuations  since  1879. 

[MiUioDB  omitted.] 


For  Fisoal  Years  Ending 
30th  June. 


Ordinary  national  rev- 
enue   

Ordinary  national  ex- 
penditure (exclu- 
sive of  sinking  fund 
and  interest  on 
debt) 

Net  public  debt      .     . 

Interest  on  public 
debt 


1875. 

1880. 

1881. 

1882. 

1883. 

284-0 

333-5 

360-8 

403-6 

398-3 

171-5 
2,128-7 

109-1 
1,942-2 

177-1 
1,840-0 

186-9 
1,088-9 

206-2 
1,6511 

103-1 

95-8 

82-5 

7M 

50-2 

1884. 


348-5 


189-5 
1,4500 

54-6 


It  would  be  impossible  to  find  in  the  financial  position  of 
any  other  State  such  striking  evidence  of  the  increase  of 
national  wealth  as  is  discernible  in  the  above  figures. 

The  figures  which  we  have  already  quoted  will  be  sufficient 
to  convince  every  one  of  the  very  remarkable  universal  in- 
crease which  has  taken  place  in  national  wealth  during  the 
latter  part  of  the  present  century,  both  incomes  and  capital 
having  increased  in  a  much  more  noticeable  degree  during 
this  period  than  in  any  other.  We  will  therefore  proceed  to 
a  statement  of  the  causes  which  have  contributed  to  this 
vast  increase  of  wealth, —  and  this  is  a  subject  which  cannot 
be  dismissed  in  a  few  words,  but  requires,  in  order  to  make 
it  thoroughly  clear  and  comprehensive,  to  be  dealt  with  some- 
what e.xhaustivel}'.    It  will  here,  however,  be  practicable  only 


J 


U  ii  - 


m 


",'«*?'• 


480 


ECONOMIC  HISTORY. 


to  enumerate  in  aa  clear  and  concise  a  manner  as  possible 
what  have  been  the  most  important  factors  in  determining 
this  remarkable  development  of  national  wealth.  One  of  the 
chief  points  to  be  considered  is  the  influence  exercised  on  the 
economic  conditions  of  the  world  by  the  introduction  of 
machinery  and  its  substitution  for  manual  labor,  which  is 
one  of  the  growths  of  the  present  century.  The  importance  of 
the  wonderful  inventions  and  improvements  which  have  taken 
place  is  visible  in  the  effect  which  they  liave  had  upon  the  in- 
crease of  capital  invested  in  machinery,  and  which  as  an  in- 
vestment has  far  exceeded  in  profit  that  employed  in  manual 
labor.  Then  too  the  application  of  steam,  which  has  Avrought 
so  complete  a  change  in  locomotion  must  be  recognized.  As 
an  indication  of  the  vast  amount  of  the  world's  capital  which 
is  invested  in  steam  undertakings,  we  may  mention  that  Dr. 
Engel,  in  one  of  his  interesting  publications,  estimates  the 
capital  so  invested,  in  round  numbers,  at  133  milliard  marks, 
distributed  as  follows:  eighty  milliards  in  railways,  forty 
milliards  in  various  steam  undertakings,  five  milliards  in 
sea-going  steamships,  and  the  remainder  in  river  steamers. 
The  part,  then,  taken  by  steam  as  a  motive  power,  and  the 
introduction  of  machinery  in  the  improvement  of  the  eco- 
nomic conditions  of  the  world,  are  of  the  very  greatest  impor- 
tance. These  inventions  have  been  the  means  of  causing  a 
very  large  increase  in  the  accumulation  of  national,  and  in  a 
corresponding  degree  of  the  world's  wealth.  Another  impor- 
tant element  to  which  we  must  direct  attention  is  the  devel- 
opment of  the  credit  S3'stem,  which  has  in  all  civilized  parts 
of  the  world  taken  place  during  the  last  twenty-five  years. 
This  does  not  necessarily  produce  fresh  capital,  but  it  has 
the  effect  of  facilitating  the  better  application  of  capital 
which  is  anywhere  disposable;  floating  capital  is  collected 
and  is  brought  into  more  permanent  forms  of  investment. 
Deposit  banks,  savings  banks,  and  credit  institutions,  and 
above  all  the  general  employment  of  bills  of  exchange,  which 
have  now  become  universally  adopted,  have  all  been  the 
means  of  supplying  what  was  in  earlier  years  a  want  much 
felt,  and  have  become  important  factors  in  determining  the 


^"^■"•w^ 


t;  '.'1 

1    I 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


481 


augmentation  of  capital.  Tho  judiciouB  operations  of  bank- 
ing are  mainly  instrumental  in  rendering  capital  active  and 
productive.  It  will  be  seen  by  reference  to  the  international 
savings  bank  statistics,  published  by  the  Italian  Statistical 
Bureau  in  1876,  how  vast  the  operations  of  savings  banks 
were.  From  this  work  it  appears  that  although  these  insti- 
tutions were  only  established  some  forty  or  fifty  years  ago, 
yet  in  the  year  1875  in  Europe  alone  about  6,400,000,000 
,marks,  and  in  the  United  States  about  3,500,000,000  marks, 
making  in  round  numbers  a  total  of  10  milliard  marks,  had 
been  invested.  This  is  a  sufficient  indication  of  the  influence 
exercised  over  the  accumulation  of  capital  by  other  and  simi- 
lar institutions,  and  tends  to  show  how  by  this  credit  system 
activity  and  usefulness  have  been  given  to  accumulations 
which  without  these  benefits  would  have  become  mere  hoards. 
And  lastly,  we  come  to  the  question  of  the  maintenance  of 
the  working  population;  and  here  we  cannot  lay  too  much 
stress  upon  the  necessity  which  exists  of  increasing  and 
maintaining  a  national  working  population,  this  population 
in  itself  representing  so  much  living  capital. 

We  will  now  turn  to  another  method  of  estimating  wealth, 
namely,  an  attempt  to  determine  the  economic  condition  of  a 
country  during  a  fixed  period  of  time.  This  is  a  labor  analo- 
gous to  that  which  the  science  of  meteorology  has  to  set 
before  itself  in  determining  the  peculiarities  of  weather  in  a 
certain  neighborhood.  As  climate  depends  on  a  great  com- 
plexity of  individual  elements,  so  what  we  call  the  world's 
economy  is  the  result  of  various  factors,  which  act  upon  tho 
material  processes  of  life  in  a  given  population  with  greater  or 
less  power.  In  both  cases,  in  the  statistics  of  meteorology  and 
economy,  a  similar  analytical  examination  of  the  causes  of  a 
total  impression  have  to  be  the  object  of  investigation ;  but 
while  meteorology  deals  with  actual  elements  or  factors  of  tho 
present,  such  as  atmospheric  pressure,  temperature,  humidity, 
direction  and  force  of  wind,  etc.,  while  it  possesses  exact 
measuring  instruments  for  the  determination  of  these,  and 
finally  can  supply  itself  with  an  endless  series  of  exact  obser- 
vations, economic  statistics  must  be  satisfied  with  surrogates 

31 


^,\^  i>)l 


m  i  J, 


-*r 


482 


ECONOMIC  HISTORY. 


of  the  methods  of  natural  science.  In  order  to  calculate  upon 
the  real  clcnienls  of  economic  conditions  when  frequently  re- 
maining concealed,  our  investigation  must  often  be  satisfied 
with  such  appearances  as  lie  upon  the  surface,  and  which  in 
their  nature  are  merely  symptoms,  and  actually  have  them- 
selves no  ultimate  effect  on  the  sources  and  action  of  things. 
Besides  this,  even  these  symptoms  cannot  in  the  real  signifi- 
cance of  the  word  be  measured  or  exactly  expressed,  but  only 
individually  employed  for  computations  and  numerical  com- 
parisons. And  finally,  the  same  i)rimary  causes  in  the  mate- 
rial life  of  culture  have  not  the  same  effects  among  all  nations 
and  at  all  times.  Thus  even  if  we  are  able  to  point  to  more 
than  mere  symptoms,  we  shall  have  to  be  careful  in  forming 
our  conclusions,  and  cannot  afl'ord  to  overlook  that  almost 
all  such  results  must  in  their  very  nature  be  empirical,  that 
is  to  say,  must  depend  upon  laws  which  are  only  binding 
upon  the  given  circumstances  of  space  and  time,  and  in  no 
way  permit  us  to  generalize.  The  desired  object,  though 
comparatively  limited,  is  nevertheless  a  difficult  one  to 
attain ;  it  presents  an  array  of  operations  which  as  regards 
physical  science  are  superfluous,  but  are  here  indispensable. 
One  of  these  operations  consists  in  the  choice  of  the  most 
important,  and  of  a  study  of  the  remainder  of  the  accessible 
symptoms  of  the  ec(momic  situaticm  which  are  capable  of 
being  estimated.  The  symptoms,  then,  of  the  world's  econ- 
omy will  be  dealt  with  in  the  following  pages.  Another, 
which  is  an  exact  operation  of  measurement,  consists,  accord- 
ing to  our  theor}',  in  the  endeavor  to  deduce  the  type  or  nor- 
mal course  of  the  groups  of  facts  or  observations  chosen  as 
symptoms  of  the  economic  situation,  which  embrace  definite 
periods.  The  esta))lishment  of  the  typo  will  result  in  many 
cases  in  the  choice  of  normal  years  as  the  point  of  compari- 
son, and  of  the  mean,  in  many  other  cases,  by  choosing  the 
commenccmont  or  the  end  of  the  series,  and  taking  the 
average  of  an  entire  period  as  the  mean. 

There  is  scarcely  any  period  which  has  been  so  character- 
ized by  a  series  of  powerful  reactions  as  that  comprised  be- 
tween the  years  1870-85.     From  1870  until  the  middle  of 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


483 


1873  almost  everywhere  the  progress  of  economic  life  could 
bo  clearly  traced,  and  this  was  a  period  marked  by  a  eom- 
men'ial  crisis  which  made  itself  universally  felt.  There 
followed  then  a  tinu!  of  depression  lasting  until  the  year 
1870,  when  a  reacticm  set  in.  This  revival  was  experienced 
in  the  United  States  about  the  end  of  1879,  and  at  the  com- 
mencement of  1880  was  felt  in  the  countries  of  western 
Eurojte,  (Jreat  Britain,  the  Netherlands,  Belgium,  Franco, 
and  Oermnny.  The  effects  of  this  reaction  were  somewhat 
slow  in  miiuii't'sting  themselves  in  European  countries,  those 
first  ex])eri('ncing  them  being  Holland,  England,  Belgium, 
and  France,  while  the  German  States,  Italy  and  Austro- 
Hungary  were  amcmg  the  last.  It  will  be  impossible  in  a 
work  of  this  description  to  pursue  a  complete  analytical  in- 
vestigation into  all  the  symptoms  which  are  likely  to  afford 
any  indication  of  the  position  of  economic  progress.  These 
symptoms  must  be  considered  in  groups,  which  we  shall 
classify  as  follows, — jtrimary  symptoms,  secondary  symp- 
toms,  and  reflective  symptimis. 

Under  primary  symptoms  we  proceed  first  to  deal  with  the 
question  of  the  extent  of  production.  There  is  no  more  re- 
liable basis  on  which  to  determine  the  real  economic  condi- 
tiim  during  a  fixed  period  of  time  than  that  which  lies  in  the 
activity  manifested  in  producing  power;  but  in  considering 
this  subject  we  must  not  lose  sight  of  the  fact  that  great  dis- 
crimination is  necessary  to  distinguish  between  the  relative 
importance  of  these  symptoms  of  increased  production.  For 
instance,  we  must  in(piire  whether  that  particular  branch  of 
industry  in  which  such  expansion  is  visible  affects  articles 
which  arc  liable  to  extremes  of  activity  and  depression,  and 
whether  by  this  the  decline  of  great  industries  is  regulated; 
and  again  we  must  satisfy  ourselves  to  what  extent  the  im- 
provements or  the  reverse  are  affected  by  the  prevailing  con- 
(liticms  of  administration  or  government.  As  affording  a 
certain  indicati(m  of  the  positicm  of  economic  progress,  we 
will  take  the  case  of  mining  industries.  Activity,  or  stag- 
nation here  are  certain  symptoms  of  favorable  or  unfavorable 
position.     On  the  other  hand,  if  we  take  the  case  of  harvests 


'til 


%\ 


^%\M 


f  i  i 


Ji'' 


if  « 


f»':^'l 


484 


ECONOMIC  HISTORY. 


and  the  wheat  productions  of  good  and  bad  years,  as  these 
are  affected  l»y  the  weather,  and  arc  entirely  dependent  for 
their  alxnKhiiice  upon  the  rain  and  smi  in  due  season,  they 
have  only  a  (;a.siuil,  and  not  what  we  should  call  a  sympto- 
matic character. 

Let  us  now  draw  our  deductions  fi'om  the  symptoms  as 
nuiuilVsted  in  the  extent  of  production  durinjj;  the  period 
1870-85.  All  of  the  more  important  industries  of  the  world 
experienced  from  1870  to  1873  a  wond«!rful  extension,  and 
as  affecting  the  world's  prosjM'rity,  this  may  be  regarded 
as  a  token  of  the  most  favorable  ecimomic  conditi(ms.  Wo 
will  take  as  an  example  the  enormous  increase  in  cotton 
industries  and  in  mines  and  iron  works.  As  regards  the 
former,  the  number  of  spindles  and  looms  have  everywhere 
increased  very  considerably,  and  the  (juantity  of  yarn  and 
woven  goods  exported  from  England,  which  amounted  in 
1870  to  1)42  million  pounds,  rose  in  1873  to  1,078  millions. 
The  value  of  cotton  gcjoiis  in  the  same  period  increased  from 
ninety-three  millions  sterling  to  104  millions,  —  similar 
symptoms  arc  everywhere  visible  in  the  industries  of  the 
world  for  the  same  period.  As  regards  iron  works,  there 
was  a  considerable  increase  in  the  number  of  furnaces  set 
up,  and  the  total  production  of  ])ig  ir<m  in  the  world  rose 
from  twelve  million  tons  in  1870  to  nearly  fifteen  millions 
in  1873.  Everything  during  this  period  in  fact  tended  to 
prove  that  the  world's  prosperity  was  making  very  rapid 
strides.  A  change,  however,  was  wrought  by  the  commer- 
cial crisis  of  1873,  and  the  effect  of  this  crisis  was  to  para- 
lyze both  the  textile  and  iron  industries,  the  statistics  of  the 
amount  of  jiroduction  in  each  case  showing  a  gradual  but 
steady  diminutitm.  In  the  chief  centres  of  the  iron  industry 
there  were,  at  the  end  of  1876,  2,537  furnaces  in  existence, 
which  were  approximately  capable  of  producing  at  the  lowest 
estimate  twenty  million  tons  of  iron;  there  were,  however, 
but  1,329  of  these  furnaces  at  work,  while  1,208  were  at  a 
standstill,  and  the  quantity  of  iron  produced  amounted  to 
only  280  million  centners. 

Again  in  1878  we  have  very  good  authority  for  stating  that 


■-■!  I? 


PROGRESS  IN  ThADE  AND  INDUSTRY. 


485 


(ars,  as  thcso 
Icpoiidont  for 
•  season,  they 
ill  a  sympto- 

symptoms  as 
ijr  the  period 
s  of  the  world 
xtension,  and 

be  regarded 
iditions.  Wo 
[ISO  in  cotton 
s  regards  the 
vc  cvcrywhero 

of  varn  and 

amounted  in 
,078  niillions. 
ncrcascd  from 
ms,  —  similar 
ustrics  of  tho 
L  works,  there 
f  furnaces  set 
ho  world  rose 
iftcen  millions 
fact  tended  to 
ig  very   rapid 

the  commcr- 
is  was  to  para- 
tatistics  of  the 

a  gradual  but 

iron  industry 
3  in  existence, 
g  at  the  lowest 
ivcre,  however, 

,"208  were  at  a 
i  amounted  to 

or  stating  that 


it  was  a  time  of  almost  universal  depression.  To  dvnionstratc 
this  more  clearly,  w<!  will  take  tho  case  of  the  most  impor- 
tant of  the  great  industries,  namely,  the  cotton  industries, 
which  in  (Ireat  Britain,  under  favorable  circumstnnces,  give 
employment  to  some  four  millions  of  people.*  In  the  years 
1870  and  1877,  though  there  were  large  sales  owing  to  a  great 
amount  of  stock  having  accumulated,  tho  prices  obtained 
were  considerably  below  tho  market  value.  In  1878  there 
set  in  a  complete  cotton  crisis,  and  the  effects  of  this  were 
more  severe  than  any  which  had  been  experii-ntied  by  the 
preceding  generation.  In  the  more  lirmly  established  houses 
tho  hours  of  labor  were  shortimed,  while  in  others  business 
was  entirely  suspended,  and  there  ensued  a  period  of  de- 
pression, not  only  as  regards  Kngland,  but  in  fact  the  whole 
world,  imparallelcd  in  commercial  history.  According  to 
Ellison's  cotton  reports  the  dejjression  reached  its  climax 
during  the  first  three  months  of  1871),  when  there  was  appar- 
ent an  indication  of  a  grand  revival  of  trade.  The  same 
features  which  characterized  the  cotton  trade  wore  apparent 
in  woollen,  silk,  and  linen  industries,  —  the  depression  in 
the  two  latter  being  more  marked  than  in  the  former. 

It  was  only  in  tho  latter  part  of  1879  and  in  the  beginning 
of  1880  that  a  marked  improvement  was  to  bo  seen  in  most 
of  the  important  industries.  It  was  particularly  noticeable 
in  tho  coal  trade,  tho  increase  in  the  production  of  which  in 
Great  Britain,  Germany,  France,  Belgium,  and  more  espe- 
cially in  America  (from  fifty-two  million  tons  in  1878  to  sixty- 
nine  millions  in  1880),  may  be  assuredly  taken  as  a  certain 
indication  of  a  steady  improvement  in  the  world's  economic 
conditions.  Soon  afterwards,  in  the  autumn  of  1879,  a  stim- 
ulus was  given  to  the  production  of  iron  in  America,  followed 
in  a  few  months  by  renewed  activity  in  tho  iron  industries 
of  Great  Britain  and  most  of  the  European  countries.  The 
fires  which  had  been  for  some  time  extinguished  were  once 
more  kindled,  and  the  production  of  iron  increased  in  one 
year  at  the  rate  of  between  twelve  and  twenty-one  per  cent. 
There  was  also  renewed  activity  in  the  smelting  and  puddling 

'  This  seems  a  great  over-estimate.  —  Editor  of  "Journal." 


I'  nt' 


.".- 


1-. 


486 


ECONOMIC  HISTORY. 


works,  and  in  fact  towards  the  end  of  1880  there  was  not 
only  a  marked  but  a  widespread  improvement  of  trade.  The 
cotton  industries  of  the  world  particularly  exhibited  signs 
of  revival,  and  this  may  be  accepted  as  a  certain  symptom  of 
an  amelioration  of  the  economic  position.  Taking  the  case 
of  spun  yarn,  the  weekly  production,  which  in  Great  Britain 
amounted  in  the  year  1878-79  to  50,026  pounds,  and  on  the 
Continent  to  47,352  pounds,  rose  in  1879-80  to  58,038  and 
50,344  pounds  respectively,  thus  showing  an  increase  in  this 
one  article  of  572,200  pounds,  or  nearly  twelve  per  cent  in 
this  year  alone.  The  other  branches  of  textile  industries  did 
not  in  the  same  degree  exhibit  such  an  improvement,  yet  it 
was  evident  that  toward  the  close  of  1880  unmistakable  signs 
of  revival  were  not  wanting.  This  revival  continued  during 
the  years  1881-82,  but  was  not  however  destined  to  be  per- 
manent. The  ca))acity  of  the  markets  of  the  world  was 
everywhere  overestimated,  and  the  extent  of  production  in 
the  principal  industries  soon  exceeded  the  demand.  Al- 
though in  1883  an  extension  in  some  of  the  branches  of  pro- 
duction was  still  noticeable,  yet  the  prices  of  the  various 
products  had  commenced  to  decline.  During  the  years  1884- 
85  the  decline  in  the  ])roduction  of  all  the  industries  to  which 
we  have  here  called  attention  was  most  clearly  marked ;  and 
as  these  industries  comprise  three-quarters  of  the  value  of 
the  entire  production  of  the  world,  depression  or  activity  in 
them  forms  an  excellent  indication  of  the  actual  prosperity 
of  the  world. 

Again,  the  extent  of  consumption  is  of  symptomatic  im- 
portance in  regard  to  the  condition  of  national  wealth. 
The  increase  or  decrease  in  the  consumption  of  articles 
which  may  be  termed  necessaries,  such  as  breadstuffs,  provi- 
sions, and  clothing,  are  not  such  reliable  signs  of  an  im- 
provement or  the  i-everse  in  national  prosperity  as  the  same 
fluctuations  which  may  be  observed  in  those  articles  which 
are  not  indis])ensablc  to  man,  and  come  under  the  heading  of 
luxuries,  as  it  is  obvious  that  in  a  time  of  depression  there 
would  be  a  far  more  restricted  consumption  in  the  latter  than 
would  be  found  if  trade  and  industries  were  flourishing  and 


PROGRESS  IN  TRADE  AND  INDUS  J  RV. 


487 


there  was  not 
>f  trade.     The 
chibited  signs 
in  symptom  of 
Liking  the  case 
Great  Britain 
ds,  and  on  the 
to  58,038  and 
iicrease  in  this 
vc  per  cent  in 
industries  did 
)vcment,  yet  it 
istaltable  signs 
iitinued  during 
ned  to  be  per- 
the  world  was 
production  in 
demand.     Al- 
ranches  of  pro- 
of the  various 
he  years  1884- 
istries  to  which 
y  mai'ked ;  and 
)f  the  value  of 
1  or  activity  in 
tual  prosperity 

mptomatic  im- 
itional   wealth, 
ion  of  articles 
adstuffs,  provi- 
igns  of  an  im- 
■ity  as  the  same 
articles  which 
the  heading  of 
i'pression  there 
the  latter  than 
flourishing  and 


prosperous.  Although  the  data  arc  of  a  somewhat  meagre 
description,  we  will  again  take  the  period  of  1870-85  in 
which  to  form  our  conclusions  as  to  the  position  of  national 
wealth,  judging  from  the  extent  of  consumption.  If  we  look 
first  at  the  consumption  of  coffee,  tea,  sugar,  and  tobacco, 
it  would  appear  that  the  same  indications  are  shown  of 
material  prosperity  during  the  i)eriod  of  1870-73,  and  that 
the  effect  of  the  commercial  depression  which  followed  this 
period  did  not  so  seriously  affect  the  national  wealth  as 
might  have  been  expected,  the  consumption  being  certainly 
to  some  extent  limited,  but  in  most  countri.L.  only  in  a  very 
slight  degree.  From  1878  to  the  end  of  1879  seems  to  have 
been  the  most  unfavorable  time  of  the  whole  period.  On 
the  other  hand,  in  the  year  1880  a  revival  is  perceptible 
throughout  the  economic  world,  which  continued  with  vigor 
during  the  years  1881-82,  and  was  again  checked  in  the  years 
1883-84.  As  an  example  of  the  consumption  of  coffee,  the 
supply  received  in  Europe  in  1871  amounted  to  2.47  million 
centners,  in  1875  to  3.30  millions,  but  in  1880  it  fell  as  low 
as  2.74  million  centners.  From  1880  the  consumption  stead- 
ily increased  until  1883,  when  it  reached  4.39  million  cent- 
ners. It  then  again  declined  to  4. 09  million  centners  in  1884, 
and  to  4.31  in  1885.  The  great  increase  in  the  consumption 
of  tea  in  1870-74  was  almost  imiversal;  it  was  only  in  1878- 
79  that  the  consumption  was  first  checked ;  and  in  the  years 
1880-83  it  again  distinctly  increased.  The  same  may  be  said 
as  regards  tobacco.  A  study  of  those  articles  in  individual 
countries  also  reveals  similar  economic  indications.  In 
America,  for  instance,  in  the  fiscal  year  1879-80  the  quan- 
tity of  coffee  imported  amounted  to  sixty-nine  million  pounds, 
or  1.4  pounds  per  head  of  the  community;  that  of  tea  to 
twelve  million  pounds,  or  0.25  pounds  per  head;  tobacco 
leaf  to  three  millions  ;  wine  6,394  million  gallons  and 
1,303,356  bottles;  and  the  American  peoj^e  retained  in  this 
year  for  hon^o  consumption  about  130  million  pounds  more 
of  refined  sugar  than  they  had  done  in  previous  years.  In 
England,  though  this  was  a  favorable  year,  yet  the  increase 
in  luxuries  was  small,  only  cocoa,  wine,  and  tobacco  being 


.  I!l 


''^  -t 


M 
mi 


;/   ■■?:■. 


!|i 


I 


488 


ECONOMIC  HISTORY. 


consumed  in  greater  quantities,  whereas  there  was  a  decrease 
in  tea,  coffee,  and  sugar.  An  examination,  however,  of  the 
return  of  taxes  for  the  last  nine  mouths  of  the  year  1880 
point  conchisively  to  the  fact  that  tlie  economic  position  was 
substantially  ameliorated.  In  France  the  signs  of  increas- 
ing prosperity  were  more  apparent  than  in  England,  a  very 
considerable  augmentation  in  the  imports  of  coffee,  sugar, 
and  tea  being  perceptible  in  1880,  and  although  this  year 
was  not  a  very  favorable  one  as  regards  the  wine  production, 
yet  as  a  set-off  against  this  there  were  in  1880,  852,000 
hectolitres  more  beer  consumed  than  in  1879,  and  about 
9,463  kilograms  (valued  at  nine  million  francs)  of  tobacco 
and  cigars  than  in  the  previous  years,  and  there  are  not 
wanting  signs  to  show  that  this  increase  of  material  prosper- 
ity was  not  of  a  spasmodic  character.  A  similar  progress  was 
also  to  be  seen  in  Belgium.  And  finally  we  will  take  the 
case  of  Germany,  where  in  the  year  1878  about  8,7  million 
marks  more  duty  was  paid  on  luxuries,  such  as  sugar,  to- 
bacco, brandy,  and  beer,  than  in  previous  years,  and  this  in 
connection  with  the  information  already  given  with  regard 
to  the  imports  of  foreign  produce,  effectually  removes  all 
doubt  as  to  tho  improvement  at  that  time  in  its  economic 
position.  Only  in  Italy  was  there  to  be  found  a  slight  indi- 
cation of  an  unfavorable  tendency,  and  in  Austria  there  was 
an  inference  of  the  maintenance  o.P  the  status  quo,  the  revival 
in  both  instances  having  taken  place  since  1880. 

No  one  who  has  studied  the  comiaoi-cial  statistics  of  the 
decade  1870-1880  can  fail  to  be  impressed  with  the  enormous 
increase  which  has  taken  place  in  the  consumption  of  textile 
fabrics,  iron,  steel  rails,  and  the  production  of  other  sta[)le  in- 
dustries. To  follow  these  in  all  their  details  would  be  out  of 
place  here;  it  will  only  bo  necessary  to  remark  that  they  ex- 
perienced a  moderate  rise  dating  from  the  year  1873,  and  a 
partial  decline  in  1880,  As  an  American  writer  forcibly  put 
it,  the  poor  man  in  the  time  of  depression  wore  his  coat  twice 
as  long  as  he  otherwise  would,  the  rich  man  entertained  less, 
and  in  many  instances  disposed  of  his  horses  and  carriages ; 
the  tailor  and  the  shoemaker  complained  that  they  had  much 


-Ik'* 


u,' 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


489 


to  meud  and  but  little  to  make.  As  an  illustration  of  this, 
we  may  mention  that  in  England  in  1878  about  twenty-six 
million  pounds  less  wool  and  897, o8d  pounds  less  silk  were 
consiuned  than  in  1877,  and  besides  this,  all  the  warehouses 
were  full  of  stock.  The  universal  decrease  in  the  consump- 
tion of  these  staple  articles  continued  during  the  gloomy 
period  1874-79.  The  depression  was  of  such  a  lasting  char- 
acter, and  carried  such  disheartening  effects  in  its  train, 
that  one  hardly  cared  to  inquire  how  it  happened  that  such 
an  unfavorable  state  of  affairs,  unbroken  by  any  prospect  of 
a  speedy  revival,  could  exist  in  central  Europe  and  America. 
With  this  restriction  in  consumption  was  associated  a  cur- 
tailment of  profits  and  a  consequent  lessening  of  income; 
and  when  in  1879  the  horizon  commenced  to  clear,  and  the 
first  ray  of  hope  was  to  be  seen,  it  was  welcomed  with  a 
feeling  of  intense  relief  by  all  classes  of  the  community. 

We  will  now  see  from  the  extent  of  commercial  facilities 
what  conclusions  may  be  formed  as  to  the  actual  economic 
position;  and  it  appears  to  us,  after  many  years  of  patient 
observation,  that  the  increased  activity  in  commercial  enter- 
prises should  assuredly  be  placed  in  the  front  rank  of  what  we 
have  called  the  primary  symptoms.  If  one  follows  the  im- 
provements which  have  during  the  last  few  years  been  made 
in  railways,  postal  systems,  telegraphs,  banking,  etc.,  one 
cannot  fail  to  be  impressed  with  their  very  vast  importance 
as  factors  in  determining  the  condition  of  the  world's  pros- 
perity. Thus,  in  all  civilized  parts  of  the  world,  railways, 
one  of  the  most  important  of  these  factors,  showed  a  very 
rapid  increase  from  1870  to  1873  or  1874,  both  in  the  number 
of  passengers  carried  and  in  the  quantity  of  goods  conveyed, 
and  as  a  natural  consequence  the  receipts  from  both  sources 
greatly  increased.  From  1874  to  1878,  and  in  many  countries 
until  1879,  there  ensued  a  period  of  stagnation  in  railroad 
enterprise,  and  in  fact  to  such  an  extent  that  not  only  were 
the  effects  very  disastrous  as  regards  industry,  but  great  social 
dangers  were  apprehended. 

As  an  example  of  the  stagnation  of  industrial  life  in  North 
America,  we  may  state  that  the  loss  to  holders  of  scrip  in 


4     II 


490 


ECONOMIC  HISTORY. 


bankrupt  or  worthless  railways  in  1877  is  estimated  in  round 
numbers  at  1000  million  dollars,  and  that  they  were  power- 
less to  prevent  the  fearful  strike  which  happened  on  the  Balti- 
more and  Ohio  Railway  on  16th  July,  1877.  It  was  only  in 
1879,  or  the  beginning  of  1880,  that  an  improvement  mani- 
fested itself  in  railway  enterprise,  and  the  revival  was  first 
experienced  in  the  United  States.  In  Great  Britain,  France, 
Belgium,  and  Austro-Hungary  the  traffic  receipts  began  then 
gradually  to  increase  ;  while  in  Italy  alone  a  similar  impulse 
docs  not  appear  to  have  been  given  until  the  autumn  of  1881. 
From  1881  to  1883  great  activity  in  railway  construction  and 
large  increase  of  traffic  were  manifested  in  all  countries  of 
western  civilization.  There  appeared,  however,  in  the  United 
States  symptoms  of  a  reaction  in  1883,  which  led  to  an  actual 
crisis  in  1884.  In  European  countries  also  a  stagnation  in 
'commerce  began  in  1884,  which  continued  in  1885,  and  caused 
a  dangerous  diminution  in  the  dividends  of  railways. 

In  shipping,  the  same  features  are  to  be  seen  as  those  which 
characterized  railway  enterprise.  During  the  same  period  we 
notice  similar  peculiarities  in  this  particular  branch  of  indus- 
try. The  fluctuations  in  the  number  and  tonnage  of  vessels 
built,  the  increase  or  decrease  in  the  tonnage  entering  or 
clearing,  and  the  amount  of  freight,  —  all  these  will  show  the 
condition  of  the  world's  prosperity. 

The  postal  and  telegraphic  statistics  are  not  of  such  valu- 
able assistance  as  symptoms  of  the  periodically  favorable  or 
unfavorable  condition  of  economic  progress.  We  will,  how- 
ever, give  the  following  figures,  as  thoy  tend  to  show,  in  a 
slight  degree,  which  were  the  favorable  and  unfavorable 
periods.  The  number  of  newspapers  and  books  sent  through 
the  British  post-office  rose  from  202  millions  in  1871  to  254 
millions  in  1873,  that  is,  about  twenty-six  millions  annually ; 
from  1873  to  1874,  however,  the  number  rose  to  only  258 
millions,  that  is,  about  four  millions  annually.  With  the  revi- 
val of  trade  this  number  again  rose  from  328  millions  in 
1879  to  412  millions  in  1882,  that  is,  about  twenty-eight 
millions  annually,  the  same  as  before  the  crisis  ;  and  from 
1882  to  1885,  to  464  m.,  indicating  a  slight  retrogression.    The 


t€ 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


491 


11       ■;     ; 


lated  in  round 
'  were  power- 
i  on  the  Balti- 
It  was  only  in 
vemcnt  mani- 
ival  was  first 
t'itain,  France, 
)ts  began  then 
milar  impulse 
tumn  of  1881. 
nstruction  and 
il  countries  of 
,  in  the  United 
;d  to  an  actual 

stagnation  in 
185,  and  caused 
ways. 

as  those  which 
lame  period  we 
i-anch  of  indus- 
4age  of  vessels 
le  entering  or 

will  show  the 

t  of  such  valu- 
ly  favorable  or 
We  will,  how- 
to  show,  in  a 
d   unfavorable 
sent  through 
In  1871  to  254 
ions  annually ; 
e  to  only  258 
With  the  revi- 
28  millions  in 
t  twenty-eight 
isis  ;  and  from 
)gression.    The 


number  of  telegrams,  which  in  1870  amounted  to  8.6  mil- 
lions, increased  in  1874  to  17.8  millions,  showing  a  yearly 
increase  of  2.3  millions ;  from  1874  to  1878  the  number 
ouly  increased  to  22.5  millions,  an  annual  increase  of  0.8 
million.  On  the  other  hana  in  1881  the  telegrams  amounted 
in  round  numbers  to  thirty  millions,  showing  an  average  in- 
crease for  three  years  of  2.6  millions,  as  before  the  crisis  ; 
but  after  that  date  there  occurred  a  diminution,  as  in  1885 
the  number  had  redched  only  33.2  millions. 

Let  us  now  take  another  of  the  primary  symptoms  of 
economic  progress  ;  viz.,  the  state  of  the  money  market.  If 
we  look  at  the  value  of  paper  currency  as  the  substitute  for 
cash  payments,  we  find  that  it  increased  during  the  period 
1869-73  about  1,679  million  marks,  and  declined  from  that 
date  till  1879,  to  the  extent  of  2,350  million  marks.  At  this 
time  there  was  a  larger  amount  of  uninvested  capital  lying  idle 
than  had  ever  before  been  known.  The  bank  hoards  accumu- 
lated, fi'om  the  commencement  of  the  period  of  stagnation, 
at  least  1,100  to  1,200  millions  of  marks  in  gold  and  silver. 
If  we  take  the  returns  of  the  two  greatest  financial  institu- 
tions in  the  world,  the  clearing  houses  of  London  and  of  New 
York,  Ave  find  that  they  show  an  increase  from  190  milliard 
marks  in  1870-71,  to  approximately  256  milliards  in  1873-74  ; 
and  on  the  other  hand  in  1878-79  they  stood  at  188  milliards, 
which,  taken  in  conjunction  with  the  increase  of  population, 
must  be  regarded  as  an  unusual  depression.  How  great  was 
the  revival  of  trade  in  1880  may  be  gathered  from  the  returns 
of  both  clearing  houses,  which  show  an  increase  from  203 
milliard  marks  in  1878-79  to  266  milliards  in  1880. 

The  condition  of  foreign  commerce,  though  of  course  af- 
fected by  the  state  of  industrial  enterprise,  also  furnishes  in 
itself  an  important  symptom  of  the  economic  situation,  as 
by  it  one  can  compare  tne  rise  and  fall  in  the  purchasing 
power  of  nations.  The  wonderful  fluctuations  in  national 
wealth  are  nowhere  more  clearly  shown  than  in  the  statistical 
trade  returns  of  the  last  decade.  The  figures,  although  they 
cannot  be  said  to  be  in  any  case  strictly  accurate,  still  point 
conclusively  to  progress  or  retrogression  in  material  pros- 


ilii! 


492 


ECONOMIC  HISTORY. 


perity.  In  almost  all  countries  the  export  returns  are  less 
reliable  than  the  statistics  of  imports.  It  must  be  borne  in 
mind  also  that  the  volume  of  foreign  trade  is  determined  not 
by  quantities  but  by  value,  and  this  is  to  a  certain  extent 
misleading,  as  changes  must  take  place  from  time  to  time  in 
the  aggregate  values  of  imports  and  exports  ;  and  one  ought 
to  consider  how  far  these  changes,  which  are  due  to  fkictua- 
tions  in  average  prices  of  commodities,  affect  the  total  import 
and  export  trade.  We  find,  then,  from  an  examination  of  the 
trade  returns  of  the  most  important  countries  of  the  earth, 
that  the  total  import  and  export  trade  increased  from  1865 
to  1872  annually  2,166  million  marks  ;  from  1872  to  1873 
about  1,620  million  marks ;  while  from  1873  to  1877  it  expe- 
rienced a  sudden  and  rapid  decline.  The  year  1878  witnessed 
the  inauguration  of  a  brighter  era,  trade  improving  to  the 
extent  of  nearly  1,400  million  marks ;  and  this  revival  con- 
tinued to  make  progress  throughout  the  years  1879  and  1880. 
To  avoid  misconception,  we  cannot  insist  too  much  upon  the 
influence  exercised  over  these  remarkable  fluctuations  by  the 
rise  and  fall  in  prices  ;  these,  of  course,  being  very  material 
elements  in  determining  the  general  totals  of  imports  and 
exports ;  but  even  making  due  allowance  for  the  effecf  of  the 
changes  in  prices,  these  fluctuations  are  none  the  less  remark- 
able, and  must  be  accepted  as  unmistakable  symptoms  of 
the  economic  situation.  From  the  trade  volumes  of  the  vari- 
ous countries,  we  find  that  the  value  of  the  foreign  trade  of 
the  United  States  in  1880  exceeded  by  308  million  dollars 
that  of  the  preceding  year.  Great  Britain,  for  the  same 
period,  showed  an  increase  of  seventy-nine  millions  sterling, 
France  482  million  francs,  and  Austro-Hungary  55  million 
florins.  These  four  countries,  then,  will  serve  as  an  illustra- 
tion of  the  increasing  growth  of  economic  power,  having  in 
one  year  alone  raised  the  value  of  the  world's  foreign  trade 
to  the  extent  of  about  3,300  million  marks. 

We  will  now  proceed  to  an  examination  of  those  symptoms 
of  economic  progress  which  we  have  designated  above  as 
secondary  symptoms,  and  "will  consider  first  tlie  prices  of 
commodities  and  wages.    The  favorable  period,  comprised 


PROGRESS  IN  TRADE  AND  JNDUSTRY. 


493 


between  1870  and  1873,  was  characterized  by  a  general  rise 
in  the  prices  of  commodities  and  in  wages,  by  reason  of  the 
demand  for  industrial  power  far  exceeding  the  supply.  If 
we  look  at  the  trade  circulars  of  London,  Hamburg,  and 
New  York,  which  contain  regularly  the  same  staple  commodi- 
ties, we  find  that  the  highest  prices  as  regards  textile  fabrics, 
iron,  tin,  copper,  most  articles  of  food,  and  colonial  produce, 
were  quoted  in  1873  and  1874.  The  tables  published  by  M. 
Bodio,  the  statements  of  Mr.  Giffen  in  the  Commercial  His- 
tory of  the  "  Statist "  (1881),  the  quotations  of  the  New  York 
commercial  papers  and  of  the  Hamburg  lists,  all  point  to 
the  existence  of  this  symptom  in  the  economic  situation. 
Laspeyres  has  conclusively  shown  that  at  hardly  any  period 
had  the  prices  of  commodities  attained  such  a  high  rate  as 
during  the  year  1871.  The  decline  was  first  apparent  in 
Hamburg  in  1872 ;  in  New  York  and  London,  owing  to  the 
enormous  supply  on  hand,  it  was  experienced  in  1874  or  1875. 
This  decline,  though  gradual  at  first,  began  rapidly  to  assume 
larger  proportions,  and  continuing  until  the  middle  or  end  of 
1879,  points  to  the  existence  of  a  distinct  commercial  depres- 
sion. Laspeyres  states,  on  the  authority  of  Hamburg  quota- 
tions, that  the  fall  in  prices  of  commodities  in  Germany  from 
1873  to  1877  had  been  greater  than  after  an  experience  of 
forty  years  had  been  thought  possible.  As  regards  England 
the  "  Economist,"  in  its  annual  review,  gives  a  very  interest- 
ing statement  showing  the  prices  of  staple  commodities  in 
1870,  as  compared  with  1845-50,  the  years  for  which  the 
index  number  of  100  may  be  taken.  From  this  it  appears 
that,  taking  twenty -two  categories  whoso  total  index  number 
is  originally  2,200,  the  prices  stood  in  1870  at  2,689,  and  in 
1873  had  increased  to  2,947,  and  declined  in  1879  as  low  as 
2,202  ;  that  is,  had  fallen  to  the  prices  of  1845-50.  Mr. 
Giffen  points  out  in  an  exhaustive  review  that,  with  but  few 
exceptions,  the  English  heavy  goods  in  the  period  comprised 
between  1873-79  became  from  26  to  66  per  cent  cheaper.  In 
1878  lower  prices  ruled  than  had  ever  been  quoted  in  London 
since  1850.  M.  A.  de  Foville,  in  a  series  of  comparative  state- 
ments, gives  some  interesting  details  of  trade  values;  from 


^M\ 


II 


{ifiifi 


\m- 


494 


ECONOMIC  HISTORY. 


these  we  gatlier  that  in  1877  the  values  of  hnports  into  France 
were  14.5  per  cent,  and  of  exports  27.1  per  cent  lower  than 
in  1802.  The  same  decline  was  experienced  everywhere,  and 
it  was  a  period  of  sucli  universal  commercial  depression  tliat 
many  industrial  establishments  had  to  forsake  all  branches  ci" 
their  busiuess.  Many  important  woollen  firms  in  England  and 
America  failed,  owing  to  the  ruinous  i)rices  which  prevailed. 
The  decline  in  tlic  prices  of  coal  and  iron  caused  a  loss  in 
these  industries  in  Great  Britain  of  from  60  to  70  per  cent. 

The  enhancement  of  prices  was  first  observable  in  the 
United  States,  and  was  noticeable  in  the  case  of  pig  iron,  silk, 
and  steel,  at  the  end  of  1878,  and  this  upward  tendency  con- 
tinued till  the  middle  of  1879.  For  example,  Pennsylvania 
pig  iron  rose  in  1878  from  10.5  to  18.5  dollars,  and  in  1879 
from  28  to  32.5 ;  it  continued  to  rise,  until  in  1880  it  attained 
the  average  price  of  38  dollars  per  ton,  approximately  the 
same  rate  as  was  quoted  in  1873 ;  in  the  same  way  the  Glas- 
gow warrants,  which  were  quoted  in  1879  at  408.  per  ton, 
reached  the  high  price  of  738.  in  the  year  1880 ;  and  this 
favorable  impulse  was  not  wholly  confined  to  England  and 
America,  but  was  visible  throughout  the  commercial  world. 
The  twenty-two  goods  categories  of  the  "  Economist,''  which 
we  mentioned  above,  ascended  from  tlie  lowest  index  num- 
ber in  1879;  viz.,  2,202,  in  one  year,  to  2,538,  an  increase  of 
about  16  per  cent.  Heavy  goods,  such  as  wool,  cotton,  yarn, 
twist,  and  manufactures,  experienced  during  the  course  of 
1880  a  still  greater  enhancement  of  prices.  According  to  the 
published  statistics  also  of  Germany,  the  rise  of  wholesale 
prices  in  1880,  as  compared  with  1879,  was  of  a  more  marked 
character  tlian  was  a])parent  in  the  returns  of  the  majority  of 
tlie  other  European  countries. 

In  connection  with  the  variation  in  prices,  we  ought  at  the 
same  time  to  study  the  influence  they  exercised  over  wages. 
Tliese  constitute  an  important  symptom  as  regards  industrial 
condition,  and  are  instrumental  in  determining  the  degree  of 
the  material  prosperity  of  various  classes  in  the  community. 
The  old  axiom  of  political  economists,  that  wages  only  fol- 
lowed slowly  in  the  wake  of  prices,  has  of  late  years  suffered 


'■r'isr'f'iil 


PROGRESS  IN   TRADE  AND  INDUSTRY. 


495 


ts  into  France 
nt  lower  than 
erywhere,  and 
eprossion  that 
til  branches  c"" 
1  England  and 
lich  prevailed, 
ised  a  loss  in 
70  per  cent, 
irvable   in  the 
:  pig  iron,  silk, 
tendency  con- 
,  Pennsylvania 
s,  and  in  1879 
880  it  attained 
I'oximately  the 
!  way  the  Glas- 
,t  40s.  per  ton, 
L880;  and  this 
)  England  and 
imercial  world, 
noraist,"  which 
St  index  nnm- 
an  increase  of 
I,  cotton,  yarn, 
the  conrse  of 
cording  to  the 
!  of  wholesale 
a  more  marked 
he  majority  of 

re  ought  at  the 
cd  over  wages, 
ards  industrial 

the  degree  of 
le  community, 
rages  onlv  fol- 

years  suffered 


very  considerable  modifications.  The  effect  of  the  sinking  of 
prices  upon  wages  during  the  period  of  depression  between 
1874  and  1878  was  clearly  apparent,  and  the  same  marked 
influence  exercised  by  the  impulse  given  to  commercial  ac- 
tivity and  the  improvement  of  the  industrial  condition  was 
particularly  noticeable  in  the  augmentation  of  wages  dating 
from  the  year  1879.  It  would  be  impossible  in  this  review  to 
enter  into  minute  details  of  the  fluctuations  during  the  vari- 
ous periods  of  depression  and  commercial  activity ;  but  to 
show  how  high  wages  had  risen  before  the  crisis  of  1873,  we 
may  mention  that  a  special  brand  of  champagne  was  ordered 
for  the  Belgian  mining  districts,  and  thousands  of  bottles 
consumed.  In  England  the  wages  of  coal  miners  rose  from 
4s.  M.  a  day  in  1871  to  7s.  Sd.  in  1873,  and  in  Scotland  to 
88.  Qd. ;  whereas  in  October,  1878,  these  wages  had  been  re- 
duced to  2s.  9d.  a  day,  a  decrease  to  nearly  one  third.  Fur- 
nace men  who  were  receiving  in  1869  only  38.  9d.  a  day,  in 
1872  were  paid  7s.  6d.,  and  in  1873  as  much  as  8s.  Gd. ;  but 
in  1876  they  had  to  be  content  with  48,  Gd.,  and  in  1878  with 
only  2s.  9J.  a  day.  Puddlers  were  in  1868  in  the  receipt  of 
8s.  per  ton,  in  1873  138.  2d.,  in  1874  lis.  Gd.,  and  in  1878-79 
between  7s.  and  78.  Gd.  During  this  latter  period  wages  in 
the  textile  industries  also  suffered  a  very  considerable  diminu- 
tion. For  instance,  in  one  single  year  (1877-78)  the  spinners 
and  weavers  of  northeast  Lancashire  snffered  a  reduction  in 
wages  to  the  extent  of  10  per  cent,  and  those  of  Oldbam  15 
per  cent.  It  lias  been  stated  in  the  "  Times  "  that  the  actual 
difference  of  miners'  wages  between  1873  and  1878  amounted 
to  as  much  as  twenty-six  millions  sterling.  The  reduction  of 
wages  was  not  confined  to  England  alone,  but  extended  also 
to  America.  We  find  there  tliat  after  a  period  of  coramorcial 
prosperity  and  high  wages,  there  ensued  a  time  of  such  un- 
paralleled depression  (in  1876)  in  the  mining  districts  of 
Pennsylvania  that  it  had  the  most  disastrous  results,  one 
being  a  series  of  sanguinary  riots,  which  nocessitatcd  for  a 
time  the  establishment  of  martial  law.  The  statistics  of 
England,  America,  Belgium,  and  Germany,  clearly  show  the 
increase  in  wages  from  the  commencement  of  1880.    Accord- 


1    II 


496 


ECONOMIC  HISTORY. 


10    *<.l 


ing  to  the  estimates  of  Mr.  Fallows,  it  would  appear  that  the 
Scotch  miners  in  1879  received  on  an  average  6<7.,  and  in  1880 
9c?.  a  day,  more  than  they  earned  in  1878.  And  as  regards 
the  cotton  industries,  we  gather  from  Ellison's  well-known 
reports  that  out  of  the  total  value  of  British  production,  in 
1879  only  forty-four  millions  sterling,  while  on  the  other 
hand  in  1880  forty-six  millions  sterling  were  put  by  for  wages 
and  j)ront.  From  America  we  have  abundant  information  re- 
specting the  increase  of  wages  in  agricultural,  mining,  and 
other  industrial  enterprises,  and  these  clearly  show  the  im- 
provement which  had  already  taken  place  in  1880  in  the  in- 
dustrial condition.  According  to  more  recent  statistics  wages 
continued  to  increase  during  the  years  1880-83,  and  again 
declined  in  1884-85. 

We  will  now  turn  to  the  subject  of  the  rates  of  discount,  as 
also  affording  an  indication  of  the  eoo"';omic  progress.  During 
the  period  1870-79  there  were  very  many  fluctuations  in  the 
rates  of  discount.  The  Bank  of  England,  we  find,  previous 
to  the  commencement  of  the  period  on  which  we  have  made 
our  calculations,  only  changed  its  rate  two  or  three  times,  or 
at  the  most  seven  times  yearly.  In  1870  and  1871  it  was 
altered  ten  times,  in  1872  fourteen  times,  and  in  1873  twenty- 
four  times, —  in  this  year  the  bank  I'ate  was  raised  thirteen 
times.  The  rate  of  discount  stood  during  a  period  of  fifty- 
seven  days  at  6  per  cent,  during  twenty-two  days  at  7  per 
cent,  and  during  thirteen  days  at  8  and  9  per  cent.  The 
Bank  of  Franco  in  1870  and  1874  changed  its  rate  four  times, 
and  in  the  three  years  1871, 1872,  and  1873,  the  rates  were 
established  at  5  per  cent  for  735  days,  6  per  cent  during  349 
days,  and  7  per  cent  during  twelve  days.  Similar  fluctuations 
were  also  experienced  in  Germany.  In  1874  the  commercial 
depression  commenced  to  be  universally  felt,  and  from  then 
until  the  middle  of  1878  there  were  a  greater  number  of 
changes  in  the  rate  of  interest.  The  Bank  of  England  altered 
its  rate  five  times  during  one  year,  the  Bank  of  France  once 
only,  and  the  rate  was  everywhere  so  reduced  that  it  aver- 
aged —  taking  the  chief  financial  centres,  London,  Paris, 
Amsterdam,  Berlin,  Vienna,  Frankfort,  and  Brussels  —  only 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


497 


poar  that  the 
.,  and  in  1880 
d  as  regards 
3  woU-known 
iroduction,  in 
on  the  other 
,  by  for  wages 
iformation  re- 
mining,  and 
show  the  im- 
880  in  the  in- 
atistics  wages 
B3,  and  again 

)f  discount,  as 
;rc88.    During 
nations  in  the 
find,  previous 
(ve  have  made 
;hrcc  times,  or 
a  1871  it  was 
I  1873  twenty- 
aiscd  thirteen 
leriod  of  fifty- 
days  at  7  per 
cr  cent.     The 
ito  four  times, 
;he  rates  were 
nt  during  349 
ar  fluctuations 
10  commercial 
nd  from  then 
;er  number  of 
n gland  altered 
France  once 
I  that  it  aver- 
london,  Paris, 
russels  —  only 


4.01  per  cent  in  1875,  8.52  per  cent  in  1876,  and  3.55  per  cent 
in  1877.  In  making  up  this  average,  the  higher  rates  which 
prevailed  in  Vienna,  Frankfort,  and  lierlin  (4J  to  5 J  per  cent) 
arc  taken  into  account,  as  well  as  the  lower  ones  of  London 
(2.47  per  cent),  Amsterdam  (3  per  cent),  and  Paris  (2.31  per 
cent),  although  these  last  determine  with  greater  accuracy 
the  industrial  position,  as  they  experienced  the  first  fall ;  for 
in  1870  the  bank  rate  in  London  stood  at  2  per  cent  for  255 
days,  in  1877  again  for  170  days,  and  it  was  only  towards  the 
end  of  1877  that  there  was  a  rise.  In  1878  the  Bank  of 
England  rate  of  discount  was  scarcely  more  than  3A  and  4^ 
per  cent,  but  in  the  open  markets  short  bills  were  discounted 
at  \l  and  1^  per  cent.  In  Paris,  the  rate  was  at  the  most  1^ 
and  1 J  per  cent,  and  it  stood  at  2  per  cent  only  once,  in  March, 
and  from  October  to  December  at  2J.  The  rates  at  Berlin, 
Amsterdam,  and  Brussels  exhibited  greater  regularity  in  their 
fluctuations  between  2A,  31,  and  4i  per  cent.  The  unproduc- 
tiveness of  floating  capital,  and  the  absence  of  speculative 
spirit,  cannot  be  said  to  afford  such  unfailing  symptoms  of 
material  prosperity  as  these  fluctuations  in  the  bank  rates. 
To  pursue  our  investigations  still  further,  we  find  that  dur- 
ing the  latter  part  of  1878,  and  also  in  1879,  a  greater  os- 
cillation was  to  be  found  than  in  1880 ;  again  the  increases 
in  the  rate  were  also  more  important  in  1878  and  1879  than 
in  188C,  and  clearly  indicated  a  stimulus  which  was  want- 
ing in  1880.  The  alterations  in  the  Bank  of  England  rate 
amounted  in  1878  to  11,  in  1879  to  6,  and  in  1880  to  2  only ; 
but  in  1880,  taking  six  of  the  most  important  financial  circles 
of  Europe,  these  alterations  only  amounted  to  17,  of  which,  as 
we  have  already  shown,  2  occurred  in  London,  3  in  Paris,  5  in 
Berlin,  2  in  Brussels,  3  in  Amsterdam,  and  2  in  Vienna. 
These  symptoms  tend  to  show  that  the  lowering  of  rates  of 
discount  is  a  distinct  voucher  for  the  excess  of  the  supply  of 
lending  capital  over  the  demand.  Economists  agree  in  re- 
garding them  as  indications  of  the  approach  of  a  lasting 
period  of  cheap  money. 

As  regards  investments,  these  are  mainly  dependent  upon 
favorable  or  unfavorable  economic  conditions,  as  during  a 

32 


II'' 

III 


498 


ECONOMIC  HISTORY. 


period  of  commercial  prosperity  there  would  naturally  bo  a 
larger  amount  of  available  capital  to  invest  than  would  bo  the 
case  were  depression  prevailing.  The  amount  of  capital  in- 
vested in  the  formation  of  new  industrial  establishments  and 
various  forms  of  investment  would  afford  an  insight  into  the 
condition  of  the  industrial  position.  It  appears  from  a  state- 
ment in  the  "  Moniteur  des  Int<5ret8  Matdriels,"  in  an  article 
devoted  to  the  consideration  of  the  subject  of  investments, 
that  they  averaged  during  the  ten  years  ending  1879,  6,109 
million  marks,  tho  amounts  for  the  years  1871-73  being  very 
considerably  above  tho  average,  thus  clearly  indicating  the 
existence  of  a  period  of  excessive  speculation.  The  following 
statement  shows  the  amount  invested  each  year,  and  the 
character  of  tho  investments :  — 

[MillloDa  omittod.] 


Years. 

In   8t«t«  and 
City  Loans. 

In  Credit 
luatitutioDS. 

In    lUilwaj'B 
and  other  In- 
dustrial Kntor- 
prises. 

Total. 

Above  or  below 

the  Uecenuial 

AveniKea. 

Mntkl. 

Mark!. 

M«rki. 

Miirkl. 

1870    .    . 

1 

1 

1 

45t)0 

—  1649 

1871    .    . 

9;ioo 

1200 

2f)00 

12500 

4  6451 

1872    .    . 

4380 

1504 

4106 

10110 

+  4001 

1873    .    . 

3470 

1390 

3856 

8722 

+  2613 

1874    .    . 

1208 

230 

1804 

8868 

—  2741 

1876    .    . 

372 

350 

646 

1308 

—  4741 

187tt    .    . 

2356 

60 

498 

2920 

—  3189 

1877    .    . 

4018 

320 

1384 

6322 

+    213 

1878    .    . 

28!M) 

126 

622 

3044 

—  2466 

1879    .    . 

4406 

1902 

1212 

7520 

+  1411 

1880    .     . 

1747 

1035 

1644 

4426 

—  1683 

1881     .    . 

2395 

1033 

2315 

5743 

—    366 

1882    .    . 

1075 

409 

2256 

3740 

—  2369 

1883    .    . 

1253 

.374 

1741 

3368 

—  2741 

1884    .    . 

1446 

318 

2193 

3P57 

—  2152 

1885    .    . 

1181 

151 

1332 

2664 

—  3445 

In  this  comparison  the  proportion  of  investments  in  credit 
institutions,  banks,  railway  and  industrial  enterprises,  to  public 
loans  is  of  special  significance,  and  we  therefore  present  it 
by  per  centage  in  the  following  table :  — 


W4 


11 


:!!t,„ 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


499 


Yean. 

I'ulllio 

Cnxlit 

lUllwityi, 

Yran. 

Pul>llo 

Cri'tllt 

Ruilwayi, 

Ixwui. 

Inititutiuoi. 

«to. 

LlMDi. 

luatltuUuui. 

oto. 

Pi  r  cent 

Per  cent. 

J'cr  cent. 

Percent. 

Per  cent. 

Per  cent. 

1871.     . 

74-5 

06 

100 

1870    . 

58-76 

2526 

100 

1872.     . 

43-6 

16'6 

410 

1880     . 

31)46 

23  38 

3717 

1873 .     . 

400 

100 

440 

1881     . 

41-70 

17-09 

40-34 

1874.     . 

380 

70 

560 

1882     . 

28-74 

10-03 

60-31 

1875.     . 

276 

25-75 

40-75 

1883     . 

87-20 

11-10 

6180 

1870.     . 

8076 

226 

170 

1884     . 

36-64 

8-03 

6643 

1877.     . 

73-25 

50 

21-75 

1886    . 

44-33 

5-67 

60-00 

1878.    . 

7025 

3'60 

17-25 

AboTe 

or  below 

tbo  Decnnulal 

AvenMsel. 

1549 

+ 

0461 

+ 

4001 

+ 

2013 

2741 

.... 

4741 



3189 

+ 

213 

2465 

+ 

1411 

__ 

1083 



300 



2309 



2741 

^ 

2152 

— 

-3445 

Here  wo  perceive  that  in  the  early  period  of  speculation 
private  enterprises,  and  in  the  subsequent  period  of  dej)res- 
sion  public  loans  received  the  larger  proportion  of  invest- 
ments. After  the  revival  in  1879  the  relation  between  these 
two  classes  of  investments  is  once  more  reversed,  especially 
for  the  year  1882 ;  on  the  other  hand,  since  that  date  there 
would  appear  again  to  be  an  increase  of  public  loans. 

In  the  invested  capital  for  the  same  period  of  the  several 
individual  countries,  peculiarities  similar  to  those  which  char- 
acterize the  preceding  tables  are  likewise  to  bo  found.  Of  cap- 
ital invested  in  the  English  market,  the  "  Economist "  gives 
the  following  statement ;  — 


Years. 

NomlDsl. 

Actual. 

Yeam. 

Nominal. 

Actual. 

Million  £. 

Million  £. 

Million  £. 

Million  £. 

1870     .... 

02-26 

80-00 

1879    .... 

56-47 

47-46 

1872 

151-65 

113-10 

1880  . 

122-20 

77-00 

1873 

15i-70 

10115 

1881    . 

189-40 

11525 

1874 

114-15 

110  55 

1882   . 

146-65 

94-65 

1876 

62-05 

00-85 

1883    . 

81-16 

76-90 

1876 

4320 

42-85 

1884    . 

10903 

00-00 

1877 

51-50 

38-00 

1885  . 

77-97 

77-87 

1878 

50-20 

60-40 

These  figures  may  be  taken  as  more  strictly  accurate  than 
those  affecting  the  total  investments,  as  they  relate  only  to 
a  single  stock  market ;  they  indicate,  moreover,  the  increase 
of  invested  capital  up  to  the  year  1874,  the  decrease  from 
this  period  till  1878,  and  the  rapid  recovery  since  1879;  likc- 


[I*    ''■! 


ti.  m- 


500 


ECONOMIC  HISTORY. 


wise  the  character  of  the  recent  phase  from  1881  to  1885. 
This  statement  is  the  more  interesting,  as  \vc  can  estimate 
very  nearly,  by  the  proportion  between  the  nominal  and  effect- 
ive cajjital,  whether  the  investments  were  of  a  purely  specu- 
lative or  real  character.  In  France,  ca})ital  invested  during 
the  first  six  months  of  1879  amounted  to  only  350  million 
francs,  as  compared  with  1,748  million  francs  in  the  corre- 
sponding period  of  1880.  For  the  whole  year,  ending  30th 
June,  1880,  it  amounted  in  round  numbers  to  4,000  million 
francs,  and  this  is  exclusive  of  the  Belgian,  Austrian,  and 
Russian  loans,  which  were  not  directly  floated  on  the  Parisian 
market.  There  wre  established  in  Paris,  in  the  year  1881, 
432  new  conipanios,  with  1,929  million  francs  of  capital ;  in 
the  year  1882,  328  \:ompanics, with  798  million  francs;  in  the 
year  1883,  230  coi.panies,  with  251.5  million  francs ;  and 
in  the  year  1884,  only  143  companies,  with  91.9  million 
francs.  In  Germany  during  the  first  half  of  1879,  capital  to 
the  extent  of  only  142  million  marks  was  invested,  against 
G59  million  marks  in  the  corresponding  period  of  the  ensuing 
year,  of  which  twcntv-fivc  million  marks  only  were  in  railways 
and  other  companies,  and  the  remainder  in  foreign  loans.  In 
Austria  it  is  estimated  that  the  total  amount  of  invested  cap- 
ital in  1880  was  only  170  million  florins,  compared  with  271 
million  florins  in  1879 ;  but  great  stress  is  here  laid  upon  the 
fact  that,  after  a  lengthened  period  of  inaction,  in  1880  money 
was  for  the  first  time  largely  invested  in  railways  and  commer- 
cial enterprises,  in  preference  to  foreign  loans,  —  the  amount 
represented  by  the  former  being  fifty-four  million  florins. 
Thus,  as  may  be  gathered  from  the  preceding  observations, 
statistics  of  invested  capital  afford  an  important  symptom  of 
greater  or  less  commercial  activity. 

Again  we  can  discover,  by  reference  to  financial  journals, 
tlie  ihictuations  which  have  appeared  in  the  dividends  paid 
by  railways  and  other  commercial  enterprises.  The  influence 
of  good  and  l)ad  years  exorcised  over  these  dividends  is  clearly 
shown  in  the  comparative  statements  which  tlicy  have  from 
time  to  time  publislied.  For  example,  the  depreciation  of 
foreign  stocks  on  the  London  Exchange  amounted  in  July, 


mm'^^^ 


PEOGnESS  IX   TRADE  AND  INDUSTRY. 


501 


1873,  to  49.2  millions  sterling;  and  in  October,  1875,  the  loss 
was  estimated  by  the  Foreign  Loan  Committee  of  the  Stock 
Exchange  to  amount  to  as  much  as  157.8  millions  sterling. 
There  was  in  addition  the  loss  by  the  joint-stock  banks,  four- 
teen of  which  alone,  in  1878,  sulfered,  according  to  the 
"  Economist,"  a  diminution  in  the  value  of  their  stock  of  ten 
million  pounds  sterling.  As  regards  the  chief  industrial  estab- 
lishments of  England  it  is  admitted  that  the  depreciation  in 
the  shares  of  the  cotton  spinning  and  weaving  industries  of 
Oldham  from  January,  1877,  to  1879,  represented  a  total  loss 
of  £1,31j0,000.  The  foregoing  figures,  however,  convey  only 
an  approximate  idea  of  the  general  loss  of  capital  in  Great 
Britain  and  Ireland,  the  actual  extent  being  statistically  un- 
ascertainable.  In  1880,  on  the  other  hand,  a  decided  improvi>- 
mcnttook  place  in  the  United  Kingdom,  which,  when  compared 
with  the  period  of  depression  of  1879,  is  all  the  more  clearly 
marked.^ 

As  Mr.  Giffcn  points  out  in  the  Financial  and  Commercial 
History  of  1880,  published  in  the  '•  Statist,"  the  increase  of 
selling  value  of  the  mass  of  securities  in  the  United  King- 
dom would  probably  amount  to  not  less  than  000  millions 
sterling.  In  the  United  States  the  loss  in  railway  shares, 
from  1873  to  1877,  amounted  to  nearly  one  milliard  of  dollars, 
but  the  improvement  which  took  place  after  September,  1879, 
to  a  great  extent  made  up  this  loss,  as  in  ilay,  1880,  it  was 
already  reduced  to  200  million  dollars,  and  was  soon  after- 
wards almost  entirely  removed.  A  similar  improvement  in 
tlie  value  of  securities  was  also  to  be  found  in  the  case  of 
Austria.  There  it  appeared  that  tlie  value  of  the  diff(>rent 
description  of  securities,  which  amounted  in  1873  (^lay)  to 
l.oSO  million  florins  fell  to  7o.")  in  1870 ;  in  1877  it  was  only 
879,  and  in  1878,  900  million  florins  ;  l)ut  a  steady  improve- 
ment then  set  in,  until  in  18S0  the  total  increase  in  the  value 
of  all  securities  amounted  approximately  to  300  million 
florins.  This  favorable  tendencv  continued  in  both  countries, 
as  in  Great  r)ritain,  until  the  close  of  1881,  after  which  a 
general  decline  in  securities  took  place  until  1885. 

1  See  "  Statist,"  Dec.  11,  1880,  for  full  details. 


502 


ECONOMIC  HISTORY. 


-• 


M''-' 


U  i<. 


-,'• 


h    'it' 


tih"''' 


lll 

M' 

n 

% 

""If  f^c 
'if '11 

1 

Inl^ 

n 

Statistics  of  bankruptcies  and  failures  may  likewise  be 
taken  as  unfailing  symptoms  of  the  industrial  position.  But 
our  information  as  regards  this  subject  is  by  no  means  com- 
plete, owing  to  the  scarcity  of  oflicial  data.  The  following 
table,  which  has  been  carefully  compiled  by  R.  Seyd,  serves, 
however,  to  indicate  the  economic  phases  from  1870-188J:  in 
the  United  Kingdom  by  the  number  of  failures  :  — 


Years. 

Number. 

Years. 

Number. 

1870 

1871 

1872 

1873 

1874 

1875 

8,151 
8,164 
8,112 
9,004 
9,250 
9,194 
10,848 
11,022 

1878 

1879 

1880 

1881 

1882 

1883 

15,059 
16,637 
13,147 
12,005 
11,019 
10,599 
'4,394 
6,089 

1870 

1877 

1884 

1885 

It  is  noteworthy  that  the  extreme  depression  of  the  large 
industries  in  Great  Britain  was  already  relieved  in  1878, 
whereas  of  the  smaller  trades  not  until  1879.  As  regards  the 
United  States  the  periods  of  commercial  activity  and  of  depres- 
sion are  clearly  perceptible  in  the  statistics  of  failures  i)ub- 
lished  by  Messrs.  Dun,  Wiinan,  &  Co.  According  to  these 
returns,  the  smallest  number  of  failures  in  the  Union  is  to  be 
found  in  the  years  18G9-1872;  a  depi'cssion  begins  in  the 
latter  half  of  1873,  whicli  steadily  increases  until  1878;  and 
the  years  1879-1881  witness  a  genuine  revival.  Tlie  yearly 
average  of  the  munber  of  failures,  and  the  amount  of  liability, 
in  the  different  periods  is  as  follows  :  — 


Yearly  Average. 


1800-1872 
1873-1878 
1879-1884 


Amount  of 
LiabiliticH. 


SS.'l.OOO.OOO 
200,000,000 
124,000,000 


'  Tlio  years  1884  and  1885  cannot  be  compared  with  tlie  preceding  years, 
owing  to  the  enactment,  on  25tli  Aug.,  1883,  of  a  new  and  more  stringent  bank- 
ruptcy act. 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


503 


Number. 

15,059 
10,037 
13,147 
12,005 
11,019 
10,599 
'4,394 
5,089 

rof 
es. 

Amount  of 
LiabilitiuK. 

id 

$sn,ooo,ooo 

IG 

200,000,000 

1 

124,000,000 

In  Franco  the  movement  is  not  so  strikingly  accentuated,  as 
that  country  was  less  affected  by  the  crisis  of  1873 ;  yet  the 
fluctuations  were  considerable.  Thus  in  1872  the  number  of 
declared  bankrupts  amounted  to  5,30G,  and  the  extent  of  their 
failures  was  represented  by  a  total  of  215  million  francs  ;  in 
1873,  5,508,  liabilities  218  millions;  in  1874,  5,596,  liabil- 
ities 241  millions ;  in  1875,  5,361,  liabilities  246  millions,  and 
in  1876,  5,193,  liabilities  298  millions.  It  was  not  until  1877 
that  any  real  improvement  was  visible ;  and  in  1881,  though 
tiierc  were  6,795  failures,  the  amount  of  liabilities  was  only 
236  million  francs.  Finally,  in  Austria,  according  to  the  pult. 
lished  returns,  the  number  of  insolvents  in  1875  was  1,381 ;  in 
1876,  1,777;  in  1877,  1,377;  in  1878, 1,334;  in  1879, 1,048; 
and  in  1880  only  971  failures.  The  amount  of  debt  in  1876 
was  established  at  nearly  twenty-six  million  florins ;  in  1877 
at  thirteen  millions,  and  in  1878  at  about  fourteen  millions. 

The  intimate  connection  between  the  economic  and  social 
conditions  demands  no  extended  proof.  The  bonds  of  union 
between  these  two  phases  of  life  are  so  numerous  that  we 
proceed  directly  to  a  statistical  presentation  of  a  series  of 
phenomena  which  we  have  termed  reflective  symptoms,  inas- 
nmch  as  they  reveal  the  reactions  of  a  greater  or  lesser  degree 
of  economic  prosperity  in  a  nation  or  period. 

We  here  look  first  into  the  condition  of  the  working  classes, 
and  we  find  that  during  the  favorable  period,  1870-73,  com- 
plaints of  want  of  employment  were  almost  unknown,  wln>reas 
the  demand  for  labor,  on  the  contrary,  was  great  and  wages 
were  high ;  but  in  1874  there  came  a  change,  the  hours  of 
labor  were  reduced,  and  workmen  were  discharged  in  great 
numbers.  This  was  particularly  exemplified  in  the  years 
1876-77,  when  the  conditions  of  trade  were  most  unfavorable, 
and  it  was  especially  noticeable  in  England  and  the  majority 
of  the  continental  countries.  In  America,  moreover,  in  the 
beginning  of  1877,  it  is  estimated  that  the  number  of  work- 
men totally  nnem[)loyed- amotmtod  to  half  a  million,  and 
about  an  equal  number  worked  only  one  or  two  days  a  week. 
At  the  end  of  1877  the  trades  union  committee  gave  the  num- 
ber of  unemployed  workmen  as  two  millions.     These  com- 


504 


ECONOMIC  HISTORY. 


plaints  began  to  cease  about  the  middle  of  1879,  first  in  the 
United  States  and  soon  afterwards  in  England  and  Western 
Europe.  From  the  data  respecting  the  condition  of  hil)or 
in  mining,  textile,  and  other  industries  for  1880  it  may  be 
safely  affirmed  that  the  state  of  labor  had' then  everywhere 
again  materially  improved.  In  the  American  Union,  in  par- 
ticular, there  was  a  great  demand  for  laborers,  which  contin- 
ued throughout  the  years  1881-83,  and  then  again  declined. 

Strikes,  likewise,  afford  a  characteristic  symptom  of  the 
state  of  the  labor  market,  not  only  by  their  numbers  and 
duration,  but  also  by  the  manner  in  which  they  terminate, 
whether  in  favor  of  the  employers  or  the  employed.  On  this 
general  subject  English,  American,  French,  and  Belgian  sta- 
tistics afford  valuable  information.  As  regards  Great  Britain, 
Mr.  G.  Phillips  Bevan,  in  a  very  interesting  report,  has  given 
a  ci»mparative  statement,  as  follows,  showing  the  number  of 
strikes  which  took  place  in  tbc  years  1870-79 :  — 


Years. 

Number  of 
Strikes. 

Years. 

Number  of 

Strikes. 

1870 

30 

1875 

245 

1871 

08 

187(5 

229 

1872 

.S48 

1877 

180 

1878 

365 

1878 

208 

1874 

280 

1870 

308 

The  greatest  number  of  strikes  during  this  period  occurred 
in  1872-73,  and  happened  at  a  time  when  industry  was  at  its 
highest.  There  was  then  a  very  large  demand  for  labor,  and 
a  great  inflation  in  prices,  and  although  men  were  getting 
good  wages,  yet  they  were  not  satisfied.  Though  tl: )  gener- 
ality of  them  wore  earning  more  than  they  had  ever  earned 
before,  they  struck  for  a  reduction  of  working  hours.  This  was 
the  reason  for  very  many  of  the  strikes  which  occurred  at  that 
time.  The  effort,  on  the  other  hand,  of  the  masters  to  win 
back  the  extra  hour  they  were  obliged  to  concede  in  1872-73, 
affords  an  explanation  of  the  large  number  of  strikes  in  1879. 
In  that  year  the  greatest  number  of  strikes  occurred  in  the 
building  trade  (598),  the  metal  trades  (390),  mining  Indus- 


PROGRESS  IN   TRADE  AND  INDUSTRY. 


505 


Number  of 

Strikes. 

2J5 

229 

180 

2(38 

308 

trios  (339),  and  textile  industries  (440),  which  establishes  be- 
yond a  doubt  their  symptomatic  connection  with  the  economic 
situation.  The  improvement  in  the  economic  condition,  and 
the  extension  of  raw  jjroduction,  increased,  beyond  what  could 
otherwise  have  been  expected,  the  demands  for  hi<rhcr  wages, 
and  the  number  of  strikes  in  1881-82.  In  America,  as  well 
as  in  England,  the  years  in  which  the  activity  in  commercial 
enterprises  was  greatest,  were  characterized  by  the  largest 
number  of  strikes,  —  for  examijle,  1871-72.  During  this 
I)eriod  there  was  a  cessation  of  work  in  the  anthracite  coal 
mines  of  Pennsylvania,  by  which  90,000  workmen  were  put 
on  half  time.  Strikes  in  the  coal  regions  continued,  indeed, 
in  the  years  1874  and  1875;  but  tiie  second  period  of  their 
occurrence  in  remarkable  numbers  was  not  reached  until 
1876-77.  This  was  a  period  of  great  distress,  during  which 
wages  were  reduced,  and  hands  were  discharged.  There 
resulted  in  consequence  one  of  the  most  unfortunate  strikes 
that  ever  took  place  in  America.  It  occurred  in  the  State  of 
Penns^'lvania,  and  culminated  in  open  revolt  and  bloodshed. 
Then  followed  the  strike  on  the  Baltimore  and  Ohio  Rail- 
way, which  was  also  of  a  very  serious  nature.  From  1870 
to  1880  the  social  tension  was  again  relaxed  ;  and  with  the 
revival  in  the  years  1881  and  1882  the  strikes  also  increased, 
especially  among  the  laborers  in  the  coal  mines,  iron  works, 
and  kindred  industries  of  the  Southeast.  Both  at  this  time 
and  in  1883  the  ends  of  the  workmen  were  thereby  attained. 
In  1884  and  1885,  however,  the  strikes  in  America  have  been 
chiefly  characterized  by  their  futility.  In  France,  Belgium, 
and  Germany  similar  symptoms  of  the  economic  situation 
arc  not  lacking,  but  they  appear  in  a  less  marked  degree. 
The  recent  phases  of  socialism  and  social-communism  in  those 
countries  are  an  expression  of  the  changing  situation  and  a 
reflex  of  their  economic  condition.  With  the  improvement  of 
the  latter  the  influence  of  socialistic  leaders  must  diminish. 

In  connection  with  the  subject  of  strikes  and  workmen's 
wages  we  must  not  omit  to  give  a  passing  glance  at  the  effect 
which  the  peculiar  conditions  of  the  labor  market  have  upon 
immigration  and  emigration.    In  consetiuence  of  the  increased 


506 


ECONOMIC  HISTORY. 


W 


facilities  for  emigration  this  is  a  subject  which  has  attained 
a  vast  importance,  and  may  be  classed  as  one  of  the  relevant 
symptoms  of  the  economic  position.  The  great  centre  of  at- 
traction for  those  leaving  the  more  densely  populated  of  the 
European  countries  appears  to  be  the  United  States.  As  wc 
have  already  pointed  out  there  have  been  very  many  changes 
in  the  conditions  of  commercial  activity  during  the  period 
under  our  consideration.  The  effect  these  changes  have  had 
upon  immigration  into  the  United  States  may  first  be  seen  in 
the  speculative  era  from  1871  to  1873,  when  there  was  a  very 
i!;ieat  influx  of  immigrants.  Then  in  1874-78  the  powerful 
attractions  which  induced  such  vast  numbers  to  migrate  were 
wanting;  consv. quently  we  find  at  that  time  a  considerable 
decrease  in  these  numbers.  In  1879,  with  the  return  of  pros- 
perity, there  again  appeared  an  increase  in  immigration.  This 
attain  'd  its  maximum  in  1881-82,  after  which  occurred  a 
declii.',' ..  owing  to  the  diminishing  opportunities  of  labor  and  a 
more  critical  state  of  affairs  in  the  New  World.  The  official 
si  atistics  of  the  movement  are  as  follows  :  — 


Years  Ending  30th  Juno. 

Number  of 
Immigrants. 

Tears  Ending  30th  Juno. 

Number  of 
luimigrauts. 

1870-71  

1871-72  

1872-73  

1873-74  

1874-76  

1876-70  

1870-77  

1877-78  

321,350 
401,800 
459.803 
313,339 
227,498 
]<i9,980 
141,857 
138,409 

1878-79      

1879-80      

1880-81      

1881-82     

1882-83     

1883-84      

1884-86     

177,826 
4.')7,257 
069,431 
788,902 
003,322 
618,592 
395,346 

In  this  stream  of  American  immigration  the  largest  num- 
ber of  persons  is  uniformly  supplied  by  Germany,  and  next 
to  it  by  Great  Britain  and  Ireland.  By  reference  also  to 
the  emigration  returns  of  the  other  European  countries  we 
discover  a  uniformity  of  movement  in  corresponding  years 
that  can  only  be  cxplniued  upon  similar  economic  grounds. 
According  to  these  statistics  it  can  thus  be  affirmed  in  gen- 
eral of  Europe,  as  has  been  demonstrated  by  Mr.  Giffen  for 
Great  Britain  in  particular,  that  an  increase  of  emigration 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


507 


Number  of 

le. 

lujuiigruuts. 

177,826 

457,257 

069,431 

788,092 

CO;},322 

618,592 

395,346 

is  to  be  regarded  as  characteristic  of  a  period  of  economic 
prosperity,  and  the  reverse  as  indicative  of  a  period  of 
economic  depression. 

Another  and  very  intercstinf?  symptom  of  the  conditions  of 
materiiil  prosperity  lies  in  the  movement  (Ijcwcgung)  of  the 
population.  The  variations  in  the  number  of  l)irths,  deaths, 
and  marriages  afford  clear  indications  of  the  fsivorable  or  un- 
favorable conditions  of  the  years  in  which  they  occur.  Mar- 
riages especially  would  appear  to  be  a  most  important  element 
in  determining  the  economic  condition  in  different  years.  It 
will  readily  be  conceded  that  an  increase  or  decrease  in  the 
number  of  these  point  conclusively  to  the  existence  of  mate- 
rial ease  or  the  reverse.  In  dealing.with  this  subject  for  the 
assigned  period  wo  find  that  the  years  1870-73  were  char- 
acterized by  a  very  marked  increase  in  the  number  of  mar- 
riages, thereby  indicating  the  existence  of  favorable  conditions 
and  confidence  in  a  time  of  increased  prosperity.  This  in- 
crease was  particularly  noticeable  in  Great  Britain,  Germany, 
France,  Belgium,  Austro-Hungary,  and  Holland.  With  the 
unfavorable  reaction  of  1873  and  1874,  on  the  other  hand,  the 
number  of  marriages  in  all  these  countries  began  to  decrease. 
In  Italy,  Switzerland,  Norway,  and  Denmark,  the  economic 
reaction  was  likewise  similarly  manifested  ;  but  corresponding 
to  a  later  maximum  in  the  frequency  of  marriages,  the  de- 
crease occurred  not  until  1877-78.  At  the  close  of  1879 
increasing  confidence  was  here  and  there  again  slightly  per- 
ceptible in  the  number  of  marriages.  In  their  greater  fre- 
quency, however,  during  the  years  1880  and  1881,  in  England, 
France,  Austria,  and  Italy,  we  discover  decided  and  powerful 
symptoms  of  the  improved  economic  and  social  conditions. 
In  the  United  States,  where  as  a  whole  this  relation  ought  to 
be  most  apparent,  it  is  only  to  be  proven  statistically  in 
particidar  States ;  but  this  detached  evidence  from  Massa- 
chusetts, Connecticut,  and  Rliode  Island,  shows  the  most  strik- 
ing effects  of  the  changing  prosperity  of  the  last  twelve  years 
upon  the  frequency  of  mairiages.  The  favorable  and  unfavor- 
able conditions  of  life  are  not  so  strikingly  manifested  in  the 
"movement"  of  population  as  regards  births  and  deaths  as  in 


Ill 


if 


f. 


h '  :■  I 


hv. 


508 


ECONOMIC  HISTORY. 


the  case  of  marriages.  In  the  births,  however,  a  considerable 
diminution  is  to  1)0  found,  beginning  with  the  year  1877  or 
1878  and  continuing  until  the  year  1881  or  1882.  In  the 
majority  of  European  countries  the  death  rate  was  likewise 
highest  in  those  years  in  which  the  birth  rate  was  lowest. 
The  years  of  dei)re8sion  thus  appear  not  to  have  seriously 
affected  at  the  time  the  entire  growth  of  the  population,  but 
the  after  effects  were  undoubtedly  felt  in  1879-80.  The  crisis 
of  1873,  however,  had  a  direct  and  unmistakable  influence  on 
the  number  of  suicides.  M.  Jochnick  states  that  in  twenty-two 
European  countries  the  number  of  suicides  increased  from  90 
in  every  million  of  inhabitants  during  the  quinquennial  period 
1871-75  to  119  per  million  in  the  period  1870-80.  M.  A.  von 
Oettingen,  taking  another  group  of  twenty  European  countries, 
gives  also  the  following  statement  of  the  increase  of  suicides 
in  successive  quinquennial  periods  between  1870  and  1878  :  — 


Years. 

Number 

of 
Suicides. 

Proportion 
per  Million 
Iiiliubitants. 

1870-1874    

20,n00 
20,208 
21,(i;58 
2n,(!54 
2t,'J10 

80 

1871-1876   

80 

1872-187<'i 

85 

187;;-1877 

92 

1874-1878   

97 

The  fact,  however,  must  not  be  overlooked  that  statistics  re- 
lating to  suicides  must  necessarily  be  incomplete,  as  on  this 
subject  it  is  almost  impossible  to  obtain  reliable  data,  owing  to 
omissions.  Statistics  of  mendicity  and  crime  likewise  afford 
abundant  proof  that  good  and  bad  times  make  their  influence 
felt  in  a  very  perceptible  manner  in  the  domain  of  social  life. 
They  are  consequently  an  additional  and  corroborative  symp- 
tom of  economic  progress  or  retrogression. 

It  is,  then,  by  all  the  symptoms  which  we  have  enumerated 
that  we  have  endeavored  to  estimate  the  world's  prosj)erity ; 
and  these  have  unquestionably  proved  that  in  the  period  from 
1870  to  1885  economic  conditions  have  been  exposed  to 
greater  and  more  varying  fortunes  than  they  had  ever  before 


niOGRESS  IN   TRADE  AND  INDUSTRY. 


509 


iber 

f 

ides. 

Proportion 
per  Million 
Inlmbitants. 

?M 

80 

208 

80 

688 

85 

(i;j4 

02 

•J  10 

07 

experienced.  At  the  commencement  of  the  period  there  were 
unmistakable  signs  of  an  increase  in  weultli  almost  without 
j)arallel  in  commercial  annals ;  afterwards  for  a  number  of 
years  there  were  ajiparcnt  a  sensible  decline  in  wealth  and 
an  enormous  reduction  of  profit ;  and  again,  dating  from 
the  middle  of  1879,  there  were  signs  of  renewed  commercial 
activity,  a  fresh  impetus  was  given  to  trade,  investments  were 
found  for  capital  hitherto  "unemployed,  workmen  were  in 
greater  demand,  wages  were  good,  a  very  marked  improve- 
ment was  to  be  seen  not  only  in  the  European  but  also  on  the 
American  exchanges,  and  in  fact  there  was  a  general  revival 
in  all  branches  of  trade  and  industry.  This  revival  continued 
until  the  close  of  1882  or  the  middle  of  1883,  after  which 
economic  symptoms  again  indicated  a  period  of  depression 
for  1884  and  1885.  The  recent  years  of  economic  advance 
must  be  a  convincing  proof  to  those  pessimists  who  took  such 
a  desponding  view  of  the  situation,  that  their  fears  as  to  the 
ultimate  improvement  in  material  prosi^erity  were  altogether 
groundless.  Who  is  there  who  still  believes  in  the  liypothesis 
that  the  depression  of  1874-78  marked  the  termination  of 
commercial  and  industrial  prosperity?  Who  now  believes 
that  the  crisis  of  1873  marked  a  new  era,  and  that  the  highest 
point  which  improvements  in  trade  and  industry  could  reach 
had  been  attained  ?  Who  in  like  manner  will  now  share  the 
pessimist  view  of  the  present  depression  that  in  the  future  a 
very  great  decrease  of  prosperity  is  to  be  looked  for  before  the 
increase  is  to  be  expected  ?  Past  experience  must  give  ground 
for  conlidencc  in  a  new  revival  in  the  economic  life  of  the 
present,  and  in  a  still  greater  increase  of  prosperity  for  the 
future.  Who  can  predict  what  wonderful  inventions  may  yet 
be  in  store  for  us,  —  what  improvements  electricity,  for  in- 
stance, may  effect  in  the  future  ?  Who  can  gainsay  the  im- 
provements which  are  continually  being  brought  to  bear 
upon  machinery  ?  In  looking  at  the  wonderful  strides  with 
which  cultivation  and  improvement  have  been  advancing, 
who  can  fail  to  be  impressed  with  a  sense  of  their  vast- 
ness  and  of  their  very  great  importance  ?  All  these  point 
to  the  inauguration  of  a  new  and  even  brighter  era  in  econ- 


610 


ECONOMIC  HISTORY. 


p> 

vt^ 

ii^ 

"    i( 

>t 

t 

;  ' 

] 

r 

r 

( 

' 

omic  life.  And  although  wo  arc  of  the  opinion  that  the 
characteristics  of  tlio  ensuing  economic  period  may  dilTer  ma- 
terially from  those  which  marked  the  preceding  one,  yet  after 
a  patient  study  of  the  facts  in  connection  with  the  present 
situation,  we  can  by  no  means  look  forward  to  a  period  of  con- 
tinued depression.  While  it  may  readily  bo  concluded  from 
the  symptoms  of  the  existing  depression  that  the  next  revival 
is  not  to  bo  expected  with  great  precijjitancy,  yet  the  more 
slowly  and  more  gradually  the  disturbed  ecpiilibrium  between 
production  and  consumption,  between  prices  and  wages,  and 
between  interest  upon  capital  and  profits  of  investments  is 
adjusted,  so  much  the  greater  is  the  guarantee  for  the  perma- 
nent consolidation  of  economic  life. 


APPENDICES. 


I. 


LEADING  SECTIONS  FROM  THE  ENGLISH  NAVIGA- 
TION ACTS. 


Act  of  1600,  12  Car.  II.,  c.  18. 

An  Act  for  the  Encouraging  and  Increasing  of  Shij)j)ing  and 

Navigation. 

Foil  tlio  Increase  of  Shipping  and  Encouragement  of  the  Naviga- 
tion of  this  Nation,  wherein,  under  the  good  Providence  and  Pro- 
tection uf  God,  tlie  Wealth,  Safety,  and  Strength  of  this  Kingdom 
is  so  much  concerned;  (2)  P«e  it  enacted  by  tlie  King's  most  Ex- 
cellent Majesty,  and  by  the  Lords  and  Cominons  in  this  present 
Parliament  assembled,  and  by  the  Authority  thereof,  Tliat  from 
and  after  the  lirst  day  of  December,  one  thousand  six  Imndred  and 
sixty,  and  from  thenceforward,  no  Goods  or  Commodities  whatso- 
ever shall  be  imported  into  or  exported  out  of  any  Lands,  Islands, 
Plantations,  or  Territories  to  his  Majesty  belonging  or  in  his  Pos- 
session, or  which  may  hereafter  belong  unto  or  be  in  the  Possession 
of  his  ]\Iajesty,  his  Heirs  and  Successors,  in  Asia,  Africa,  or  Aniei'- 
ica,  in  any  other  Ship  or  Ships,  Vessel  or  Vessels  whatsoever,  but 
in  such  Ships  or  Vessels  as  do  truly  and  without  Fraud  belong  only 
to  the  People  of  England  or  Ireland,  Dominion  of  Wales,  or  Town 
of  Berwick  upon  Tweed,  or  are  of  the  Built  of  and  belonging  to 
any  the  said  Lands,  Islands,  Plantations,  or  Territories  as  the  Pro- 
prietors and  right  Owners  thereof,  and  whereof  the  Master  and 
three-fourths  of  the  Mariners  at  least  are  English;  .   .  . 

III.  And  it  is  further  enacted  by  the  Authority  aforesaid, 
That  no  Goods  or  Commodities  whatsoever,  of  the  Growth,  Pro- 


'ip:  ;: 


612 


ECONOMIC  msroitr. 


(liictiou  or  Miinufiictiirc  of  Jfrica,  Asia,  or  America,  or  of  any 
Part  thereof,  or  wliiuli  are  (leMcril^'d  or  laid  dosvii  in  tlic  usual 
Maps  or  Canls  of  tliosc  Places,  lie  iinixirtt'd  into  Enijlund,  Inland, 
or  Wales,  IsIuiuIh  of  Guernseij  and  Jersey,  or  Town  of  lierwick 
upon  Tweed,  in  other  Ship  or  Ships,  Vessel  or  Vewstds  whatsoever, 
but  in  such  as  do  truly  and  without  Fraud  belong  only  to  the 
IVophf  of  EDijIand  or  Ireland,  Dominion  of  Wales,  or  Town  of 
Berwick  upon  Tweed,  or  of  the  Lands,  Islands,  Plantations,  or 
Territories  in  Asia,  Africa,  or  America,  to  his  Majesty  beloi 
as  the  Proprietors  and  right  Owners  thereof,  and  whereof  the  j- 
ter,  and  three-fourths  at  least  of  the  Mariners  are  Enijlish  ;  .   .   . 

IV.  And  it  is  further  enacted  by  the  Authority  aforesaid.  That 
no  Goods  or  Commodities  that  are  of  Foreign  Growth,  Production, 
or  ^fanufacture,  and  which  are  to  bo  brought  into  England,  Ireland, 
Wales,  the  Islands  of  Gueimsc}/  and  Jersey,  or  Town  of  lierwick 
upon  Tweed,  in  ii'/z^^tA'/i-built  Shipping,  or  other  Shipjiing  belong- 
ing to  some  of  the  aforesaid  Places,  and  navigated  by  Emjlish  ^lari- 
ners,  as  iiforesaid,  shall  be  shipped  or  brought  from  any  (tther  Place 
or  Places,  Country  t)r  Countries,  but  only  from  those  of  the  said 
Growth,  Production,  or  Manufacture,  or  from  those  Ports  where 
the  said  Goods  and  Commodities  can  only,  or  are,  or  usually  have 
been,  first  shipped  for  Transportation,  and  from  none  other  Place 
or  Countries;  .   .   . 

VIII.  And  it  is  further  enacted  by  the  Authority  afo-  1, 
That  no  Goods  or  Commodities  of  the  Growth,  Product 
^Manufacture  of  Muscovy,  or  of  any  the  Countries,  Dominions,  or 
Territories  to  the  Great  Dulce  or  Enii)eror  of  Muscovy  or  Russia 
belonging;  as  also  that  no  Sort  of  Masts,  Timber,  or  Boards,  no 
foreign  Salt,  Pitch,  Tar,  Rosin,  Hemp  or  Flax,  Raisins,  Figs, 
Prunes,  Olive-Oils,  no  Sorts  of  Corn  or  Grain,  Pot-Ashes,  Wines, 
Vinegar,  or  Spirits  called  Aqua-Vitae,  or  Prandy-Wine,  shall 
from  and  after  the  first  day  of  April,  which  shall  be  in  the  Year  of 
our  Lord  one  thousand  six  hundred  sixty-one,  bo  imported  into 
England,  Ireland,  Wales,  or  Town  of  JBerwick  upon  Tweed,  in  any 
Ship  or  Ships,  Vessel  or  Vessels  whatsoever,  but  in  such  as  do 
truly  and  without  fraud  belong  to  the  People  thereof,  or  some  of 
them,  as  the  true  Owners  and  Proprietors  thereof,  and  whereof  the 
Master  and  three-fourths  of  the  Mariners  at  least  are  English; 
And  that  no  Currans  nor  Commodities  of  the  Growth,  Production, 
or  Manufacture  of  any  the  Countries,  Islands,  Dominions,  or  Ter- 
ritories to  the  Ottoman  or  Turkish  Empire  belonging,  shall  from 


APPENDIX  I. 


513 


a,  or  of  any 

ill   tlic  iiHiiul 
UTid,  Ireland, 
II  of  Berwick 
Im  whiitHoeviT, 
;  only  to  tlu' 
I,   or  Town  (if 
liintiitionH,   or 
ity  lii'loi 
•rt'of  tlu 
if/Ush ;  .   .   . 
foresaid,  Tiiiit 
li,  l'ro(ln(;ti(in, 
jland,  Ireland, 
\n  of  Berwick 
ipping  lii'lon^'- 
Entjlish  Miiri- 
ny  other  Place 
oso  of  the  said 
u   Ports  where 
)r  usually  have 
lie  other  Place 

I'ity  af<r         I, 
rodiu't 

Dominions,  or 
!Ovi/  or  Bussla 
or  Boards,  no 
Raisins,   Figs, 
Ashes,  Wiuea, 
y-\Vine,    shall 
in  the  Year  of 
iinjiorted  into 
Tweed,  in  any 
in  such  as  do 
Mjf,  or  some  of 
id  whereof  the 
are  English: 
1,  Production, 
lions,  or  Ter- 
ig,  shall  from 


and  after  tho  first  day  of  Sej)temher,  which  shall  lie  in  the  year  of 
our  Lord  one  thousand  six  hundred  sixty-one,  Im  iniported  into  any 
tho  aforo-mentioned  places  in  any  Ship  or  Vessel,  but  whicli  is  of 
EnfjUah  built,  and  navigated,  as  aforesaid,  and  in  no  other,  except 
only  such  foreign  8iii|is  and  Vessels  as  are  of  the  lUiilt  of  that 
Country  or  J'lace  of  which  the  said  Goods  are  tho  Gr<iwtli,  Produc- 
tion, or  Manufacture  respectively,  or  of  such  Port  where  tho  said 
Goods  can  only  be,  or  most  usually  are,  first  shipped  fur  Transpor- 
tation, and  whereof  the  Master  and  three-fourths  of  tho  Mariners 
at  least  aro  of  tho  said  Country  or  I'lace;  .   .   . 

XVIII.  And  it  is  further  enacted  by  the  Authority  afore- 
said. That  from  and  after  tho  first  Day  of  April,  which  shall  bo 
in  tho  Year  of  our  Lord  one  thousand  six  humlred  sixty-one,  no 
Sugars,  Tobacco,  Cotton-Wool,  Indigoes,  Ginger,  Fustick,  or 
other  dying  Wood,  of  the  Growth,  Production,  or  Manufacture 
of  any  English  Plantations  in  America,  Asia,  or  Africa,  shall  bo 
shipped,  carried,  conveyed,  or  transported  from  any  of  the  said 
English  I'lantations  to  any  Land,  Island,  Territory,  Dominion, 
Port  or  Place  whatsoever,  other  than  to  such  other  English  I'lanta- 
tions as  do  belong  to  his  Majesty,  his  Heirs  and  Successors,  or 
to  the  kingdom  of  England  or  Ireland,  or  I'rincipality  of 
Wales,  or  Town  of  Btrwick  upon  Tweed,  there  to  be  laid  ou 
shore;  .   .   . 

Act  of  1662,  14  Car.  II.,  c.  11. 

XXIII.  And  whereas  some  Doubts  and  Disputes  have  arisen 
concerning  tho  said  late  Act,  For  increasing  and  encouraging  of 
Shipping  and  Navigation,  about  some  of  the  Goods  therein  pro- 
hibited to  be  brought  from  Holland  and  the  Parts  and  Ports  there- 
abouts; (2)  Be  it  enacted  and  declared,  that  no  Sort  of  Wines, 
(other  than  Hhenish)  no  Sort  of  Sjiicery,  Grocery,  Tobacco,  Pot- 
Ashes,  Pitch,  Tar,  Salt,  Kozin,  Deal-Boards,  Fir,  Timber,  or 
Olive-Oil,  shall  be  imported  into  England,  Wales,  or  Berwick, 
from  the  Netherlands  or  Oermany,  upon  any  Pretence  whatsoever, 
in  any  Sort  of  Ships  or  Vessels  whatsoever;  .   .   . 

Act  of  1663,  15  Car.  IL,  c.  7. 

V.  And  in  regard  his  ^lajesty's  Plantations  beyond  the  Seas 
are  inhabited  and  peopled  by  his  subjects  of  this  his  Kingdom  of 
England,  for  the  maintaining  a  greater  Correspondence  and  Kind- 
ness between  them,  and  keeping  them  in  a  further  Dependance 


I'm 


I 


614 


ECONOMIC  HISTORY. 


upon  it,  and  rendring  them  j-et  more  beneficial  and  advantageous 
unto  it  in  the  further  Iniployment  and  Increase  of  English  Sliip- 
ping  and  Seamen,  Vent  of  Englich  Woollen  and  other  Manufac- 
tures and  Commodities,  rendring  the  Navigation  to  and  from  the 
same  more  safe  and  cheap,  and  making  this  Kingdom  a  Staple,  not 
only  of  the  Commodities  of  those  plantations,  but  also  of  the 
C'ommodities  of  other  Countries  and  Places  for  the  Supplying  of 
them ;  and  it  being  the  Usage  of  other  Nations  to  keep  their  Plan- 
tations Trade  to  themselves : 

VI.  Be  it  enacted,  and  it  is  hereby  enacted,  That  from  and 
after  the  five  and  twentieth  day  of  March,  one  thousand  six  hun- 
dred sixty-four,  no  Commodity  of  the  Growth,  Production,  or  Man- 
ufacture of  Europe,  shall  bo  imported  into  any  Land,  Island, 
Plantation,  Colony,  Territory,  or  Place  to  his  Majesty  belonging, 
or  Avhich  shall  hereafter  belong  unto  or  be  in  the  Possession  of  his 
Majesty,  his  Heirs  and  Successors,  in  Asia,  Africa,  ov  America, 
( Tangier  only  excepted)  but  what  shall  be  bona-fide,  and  without 
Fraud,  laden  and  8hii)ped  in  England,  Wales,  or  the  Town  of  Ber- 
wick  upon  Tweed,  and  in  English  built  Shipping,  or  which  were 
bona-fide  bought  before  the  first  day  of  October  one  thousand  six 
hundred  sixty  and  two,  and  had  such  Certificate  thereof  as  is  di- 
rected in  one  Act  passed  the  last  Sessions  of  this  Present  Parlia- 
ment, intituled.  An  Act  for  preventing  Frauds,  and  Regulating 
Abuses  in  his  Majesty^s  Customs;  and  whereof  the  Master  aiul 
three  Fourths  of  the  Mariners  at  least  are  English,  and  which  shall 
be  carried  directly  thence  to  the  said  Lands,  Islands,  Plantations, 
Colonies,  Territories,  or  Places,  and  from  no  other  Place  or 
Places  whatsoever;  any  Law,  Statute,  or  Usage  to  the  contrary 
notwithstanding;  .   .   . 

See  English  Statutes  at  Large. 


APPENDIX  II. 


515 


IL 


IMPORTANT  SECTIONS  OF  AMERICAN  NAVIGATION 

ACTS. 


Act  of  July  20,  1789. 
Chap.  Ill.-s- An  Act  imposing  Duties  on  Tonnage. 

Be  it  enacted  hy  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assemJ)led,  That  the  fol- 
lowing duties  shall  be,  and  are  imposed  on  all  ships  or  vessels  en- 
tered in  the  United  States,  that  is  to  say : 

On  all  ships  or  vessels  built  within  the  said  States,  and  belong- 
ing wholly  to  a  citizen  or  citizens  thereof,  or  not  built  within  the 
said  States,  but  on  the  twenty-ninth  day  of  May,  one  thousand 
seven  hundred  and  eighty-nine,  belonging,  and  during  the  time 
such  vessel  or  vessels  shall  continue  to  belong  wholly  to  a  citizen 
or  citizens  thereof,  at  the  rate  of  six  cents  per  ton.  On  all  ships  or 
vessels  hereafter  built  in  the  United  States,  belonging  wholly, 
or  in  part,  to  subjects  of  foreign  powers,  at  the  rate  of  thirty  cents 
per  ton.  On  all  other  ships  or  vessels,  at  the  rate  of  fifty  cents 
per  ton. 

Sec.  3.  And  be  it  further  enacted,  That  every  ship  or  vessel  em- 
ployed in  the  transportation  of  any  of  the  produce  or  manufactures 
of  the  United  States,  coastwise  within  the  said  States,  except  such 
ship  or  vessel  be  built  within  the  said  States,  and  belong  to  a  citizen 
or  citizens  thereof,  sliall,  on  each  entry,  pay  fifty  cents  per  ton. 

1  U.  S.  Statutes  at  Large,  27. 

Act  of  Dec.  31,  1792. 

Chap.  I.    An  Act  concerning  the  Rrgii^tcring  and  Recording  of 

Sh  ips  or  Vessels. 

Sectiox  1.  Be  it  enacted,  .  .  .  That  ships  or  vessels  which  shall 
have  been  registered  by  virtue  of  the  act,  intituled  "An  act  for  regis- 
tering and  clearing  vessels,  regulating  the  coasting  trade  and  for 
other  purposes,"  and  those  which  after  the  last  day  of  March  next, 
shall  be  registered,  pursuant  to  this  act,  and  no  other  (except  such 


516 


ECONOMIC  HISTORY. 


as  shall  be  duly  qualified,  according  to  law,  for  carrying  on  the 
coasting  trade  and  fisheries,  or  one  of  them)  shall  be  denominated 
and  deemed  ships  or  vessels  of  the  United  States,  entitled  to  the 
benefits  and  privileges  appertaining  to  such  ships  or  vessels:  Pro- 
vided, Tliat  they  shall  not  continue  to  enjoy  the  same,  longer  than 
they  shall  continue  to  be  wholly  owned,  and  to  be  commanded  by  a 
citizen  or  citizens  of  said  states. 

Skc.  2.  And  be  it  further  enacted,  That  ships  or  vessels  built 
within  the  United  States,  whether  before  or  after,  the  fourth  of 
July,  one  thousand  seven  hundred  and  seventy  six,  and  belonging 
wholly  to  a  citizen  or  citizens  thereof,  or  not  built  within  the  said 
states,  but  on  the  sixteenth  day  of  May,  in  the  year  one  thousand 
seven  hundred  and  eighty  nine,  belonging  and  thenceforth  continu- 
ing to  belong  to  a  citizen  or  citizens  thereof,  and  ships  or  vessels 
which  may  hereafter  be  captured  in  war,  by  such  citizen  or  citizens, 
and  lawfully  condemned  as  prize,  or  which  have  been  or  may  he 
adjudged  to  be  forfeited  for  a  breach  of  the  laws  of  the  United 
States,  being  wholly  owned  by  a  citizen  or  citizens  thereof,  and  no 
other,  may  be  registered  as  hereinafter  directed:  Provided,  That 
no  such  ship  or  vessel  shall  be  entitled  to  be  so  registered,  or  if 
registered,  to  the  benefits  thereof,  if  owned  in  whole,  or  in  part, 
by  any  citizen  of  the  United  States,  who  usually  resides  in  a  for- 
eign country,  during  the  continuance  of  such  residence,  unless 
such  citizen  be  in  the  capacity  of  a  consul  of  the  United  States,  or 
an  agent  for,  and  a  partner  in,  some  house  or  trade  or  co-partner- 
ship, consisting  of  citizens  of  the  said  states  actually  carrying  on 
trade  within  the  said  states. 

1  Statutes  at  Large,  287. 

Act  of  March  1,  1817. 

Chap.  XXXI.  — An  Act  concerning  the  navigation  of  the  United 

St  ties. 

Be  it  enacted,  .  .  .  That  after  the  thirtieth  day  of  September  next 
no  goods,  wares,  or  merchandise,  shall  be  imported  into  the  United 
States  from  any  foreign  port  or  place,  except  in  vessels  of  the 
United  States,  or  in  such  foreign  vessels  as  truly  and  wholly  be- 
long to  the  citizens  or  subjects  of  that  country  of  which  the  goods 
are  the  growth,  j)roduetion,  or  manufacture;  or  from  which  such 
goods,  wj'.res,  or  merchandise,  can  only  be,  or  most  usually  are, 
first  shipped  for  transportation:  Provided,  nevertheless,  That  this 
regulation  shall  not  extend  to  the  vessels  of  any  foreign  nation 


APPENDIX  II. 


617 


■ying  on  the 
denominated 
ititled  to  the 
ressels:  Pro- 
,  longer  than 
manded  by  a 

vessels  built 
:he  fourth  of 
nd  belonging 
ithin  the  said 
one  thousand 
;orth  continu- 
ips  or  vessels 
m  or  citizens, 
en  or  may  be 
.f  the  United 
lereof,  and  no 
rovided,  That 
gistered,  or  if 
e,  or  in  part, 
sides  in  a  for- 
dence,   unless 
ited  States,  or 
or  co-partner- 
y  carrying  on 


5/  the  United 

ptember  next 
to  the  United 
essels  of  tlu' 
nd  wholly  be- 
ich  the  goods 
1  which  sui'h 
usually  are, 
.s-s,  That  this 
oreigu  nation 


which  has   not   adopted,  and  which   shall  not  adopt,    a  similar 
regulation. 

Sec.  4.  And  be  it  further  enacted,  That  no  goods,  wares, 
or  merchandise,  shall  be  imported,  under  penalty  of  forfeiture 
thereof,  from  one  port  of  the  United  States  to  another  port  of  the 
United  States,  in  a  vessel  belonging  wholly  or  in  part  to  a  subject 
of  any  foreign  power;  but  this  clause  shall  not  be  construed  to 
prohibit  the  sailing  of  any  foreign  vessel  from  one  to  another  port 
o*  the  United  States,  provided  no  goods,  wares,  or  merchandise, 
other  than  those  imported  in  such  vessel  from  some  foreign  port, 
and  which  shall  not  have  been  unladen,  shall  be  carried  from  one 
port  or  place  to  another  in  the  United  States. 

3  Statutes  at  Large,  351. 

Act  of  May  24,  1828. 
Chap.  CXI. — An  Act  in  addition  to  an  act,  entitled,  "An  act  con- 
cerning discriminating  duties  of  tonnage  and  impost." 

Be  it  enacted,  .  .  .  That,  upon  satisfactory  evidence  being  given 
to  the  President  of  the  United  States  by  the  government  of  any  for- 
eign nation  that  no  discriminating  duties  of  tonnage  or  impost  are 
imposed  or  levied  in  the  ports  of  the  said  nation  upon  vessels  wholly 
belonging  to  citizens  of  the  United  States,  or  upon  the  produce, 
manufactures,  or  merchandise  imported  in  the  same  from  the  United 
States,  or  from  any  foreign  country,  the  President  is  hereby  author- 
ized to  issue  his  proclamation,  declaring  that  the  foreign  discrim- 
inating duties  of  tonnage  and  impost  within  the  United  States  a»'e 
and  shall  be  suspended  and  discontinued,  so  far  as  respects  the  ves- 
sels of  the  said  foreign  nation,  and  the  produce,  manufactures,  or 
merchandise  imported  into  the  United  States  in  the  same  from  the 
said  foreign  nation,  or  from  any  other  foreign  country:  the  said 
suspension  to  take  effect  from  the  time  of  such  notification  being 
given  to  the  President  of  the  United  States,  and  to  continue  so 
long  as  the  reciprocal  exemption  of  vessels  belonging  to  citizens  of 
the  United  States,  and  tlieir  cargoes,  as  aforesaid,  shall  be  contin- 
ued and  no  longer. 

4  Statutes  at  Large,  308. 

Act  ok  Feb.  10,  18C6. 
Chap.  VIII.  — An  Act  to  regulate  the  Registering  of  Vessels. 

Be  it  enacted,  .  .  .  That  no  ship  or  vessel,  which  has  been  re- 
corded or  registered  aa  an  American  vessel,  pursuant  to  law,  and 


518 


ECONOMIC  HISTORY. 


LLiEU'i' 


i  - 


which  shall  have  been  licensed  or  otherwise  authorised  to  sail  under 
a  foreign  flag,  and  to  liave  the  protection  of  any  foreign  govern- 
ment during  the  existence  of  the  rebellion,  shall  be  deemed  or 
registered  as  an  American  vessel,  or  shall  have  the  rights  and  priv- 
ileges of  American  vessels,  except  under  the  provisions  of  an  act 
of  Congress  authorizing  such  registry. 
14  Statutes  at  Large,  3. 

Act  of  Junk  28,  1884. 

Chap.  CXXI.  — An  Act  to  remove  ceHain  burdens  on  the  American 
merchant  marine  and  encourage  the  American  foreign  carry- 
ing trade. 

Sec.  14.  [Be  it  further  enacted,"]  That  in  lieu  of  the  tax  on  ton- 
nage of  thirty  cents  per  ton  per  annum  heretofore  imposed  by  law,  a 
duty  of  three  cents  per  ton,  not  to  exceed  in  the  aggregate  fifteen 
cents  per  ton  in  any  one  year,  is  hereby  imposed  at  each  entry  on 
all  vessels  which  shall  be  entered  in  any  port  of  the  United  States 
from  any  foreign  port  or  place  in  North  America,  Central  America, 
the  West  India  Islands,  the  Bahama  Islands,  the  Bermuda  Islands, 
or  the  Sandwich  Islands  or  Newfoundland;  and  a  duty  of  six  cents 
per  ton,  not  to  exceed  thirty  cents  per  ton  per  annum,  is  hereby 
imposed  at  each  entry  upon  all  vessels  which  shall  be  entered  in 
the  United  States  from  any  other  foreign  ports: 

Sec.  17.  When  a  vessel  is  built  in  the  United  States  for  foreign 
account,  wholly  or  partly  of  foreign  materials  on  which  import 
duties  have  been  paid,  there  shall  be  allowed  on  such  vessel,  when 
exported,  a  drawback  equal  in  amount  to  the  duty  paid  on  such 
materials,  to  be  ascertained  under  such  regulations  as  may  be  pre- 
scribed by  the  Secretary  of  the  Treasury.  Ten  per  centum  of  the 
amount  of  such  drjiwback  shall,  however,  be  retained  for  the  use  of 
the  United  States  by  the  collector  paying  the  same. 

23  Statutes  at  Large,  67. 

Act  op  March  3,  1891. 

Chap.  DXIX.  — An  Act  to  inovide  for  ocean  mail  service  f':.iioeen 
the  United  States  aiid  foreign  ports,  and  toj^romote  commerce. 

Be  it  enacted,  .  ,  .  That  the  Postmaster-General  is  hereby  author- 
ized and  empowered  to  enter  into  contracts  for  a  term  not  less  than 
five  nor  more  than  ten  years  in  duration,  with  American  citizen.*, 
for  carrying  of  mails  on  American  steamships,  between  ports  of  the 


1  i^-l'ii-''-  i  :■  *. 


APPENDIX  II. 


619 


United  States  and  such  ports  in  foreign  countries,  the  Dominion  of 
Canada  excepted,  as  in  his  judgment  will  best  subserve  and  pro- 
mote the  postal  and  commercial  interests  of  the  United  States,  the 
mail  service  on  such  lines  to  be  equitably  distributed  among  the 
Atlantic,  Mexican,  Gulf,  and  Pacific  ports.   .   .  . 

Sec.  3.  That  the  vessels  employed  in  the  mail  service  under  the 
provisions  of  this  act  shall  be  American  built  steamships,  owned 
and  officered  by  American  citizens,  in  conformity  with  the  existing 
laws.  .  .  .  They  shall  be  divided  into  four  classes.  The  first  class 
shall  be  iron  or  steel  screw  steamships,  capable  of  maintaining  a 
speed  of  twenty  knots  an  hour  at  sea  in  ordinary  weather,  and  of  a 
gross  registered  tonnage  of  not  less  than  eight  thousand  tons.  No 
vessel  except  of  said  first  class  shall  be  accepted  for  said  mail  ser- 
vice under  the  provisions  of  this  act  between  the  United  States 
and  Great  Britain.  The  second  class  shall  be  iron  or  steel  steam- 
ships, capable  of  maintaining  a  speed  of  sixteen  knots  an  hour  at 
sea  in  ordinary  weather,  and  of  a  gross  registered  tonnage  of  not 
less  than  five  thousand  tons.  The  third  class  shall  be  iron  or  steel 
steamships,  capable  of  maintaining  a  speed  of  fourteen  knots  an 
hour  at  sea  in  ordinary  weather,  and  of  a  gross  registered  tonnage 
of  not  less  than  two  thousand  five  hundred  tons.  The  fourth  class 
shall  be  iron  or  steel  or  wooden  steamships,  capable  of  maintaining 
a  speed  of  twelve  knots  an  hour  at  sea  in  ordinary  weather,  and  of 
a  gross  registered  tonnage  of  not  less  than  fifteen  hundred  tons. 

Sec.  4.  That  all  steamships  of  the  first,  second,  and  third 
classes  employed  as  above  and  hereafter  built  shall  be  constructed 
with  particular  reference  to  prompt  and  economical  conversion  into 
auxiliary  naval  cruisers,  and  according  to  plans  and  specifications 
to  be  agreed  upon  by  and  between  the  owners  and  the  Secretary  of 
the  Navy,  and  they  shall  be  of  sufficient  strength  and  stability  to 
carry  and  sustain  the  working  and  operation  of  at  least  four  effect- 
ive rifled  cannon  of  a  caliber  of  not  less  than  six  inches,  and  shall 
be  of  the  highest  rating  known  to  maritime  commerce.   .   .   . 

Sec.  5.  That  the  rate  of  compensation  to  bo  paid  for  such  ocean 
mail  service  of  the  said  first-class  ships  shall  not  exceed  the  sum  of 
four  dollars  a  mile,  and  for  the  sccoTid-class  ships  two  dollars  a 
mile,  by  the  shortest  practicable  route,  for  each  outward  voyage; 
for  the  third-class  ships  shall  not  exceed  one  dollar  a  mile,  and  for 
the  fourth-class  ships  two-thirds  of  one  dollar  a  mile  for  the  actual 
number  of  miles  required  by  the  Post  Oflico  Department  to  be 
travelled  on  each  outward  bound  voyage :  .   .  . 

2G  Statutes  at  Large,  830. 


520 


ECONOMIC  HISTORY. 


A'X  M 


m. 


THE  AMERICAN  CIVIL  WAB. 
COST  OF  THE  WAR. 

From  Report  op  Special  Commissioner  of  the  Revenue  (David 
A.  Wells)  1869,  pp.  iv-vii. 

It  would  seem  desirable  at  this  point,  now  that  all  feeling  in  re- 
gard to  the  subject  from  its  bearing  on  political  questions  lias 
apparently  passed  away,  to  place  upon  record  the  exact  cost  of  the 
war,  as  nearly  as  the  same  can  be  determined.  With  this  object 
attention  is  asked  to  the  following  exhibit:  — 

The  amount  of  outstanding  national  indebted- 
ness March  7,  1861,  was  $76,455,299.28. 

During  the  four  years  of  war  which  terminated 

in  April,  1865   (April   1,  1801,  to  April  1, 

1865),  the  actual  receipts  of  the  treasury, 

were  as  follows :  — 
From  internal  revenue    .     .    $314,337,317  01 

From  customs 280,861,618  45 

From  lands 1,812,083  80 

From  direct  tax     ...     .  4,068,259  31 

From  miscellaneous  sources         74,120,413  37 

Total  receipts $875,799,691  94 

The  receipts  of  revenue  from  April  1,  1865, 

to  June  30,   1869,  inclusive,  during  which 

period  the  larger  portion  of  the  expenditures 

has  been  directly  in  consequence  of  the  war, 

were  as  follows :  — 
From  internal  revenue    .     .     $967,207,221  41 

From  customs 729,991,875  97 

From  lands 7,402,188  28 

From  direct  tax      ....  9,017,217  30 

From  miscellaneous  sources       194,949,122  13 

Total  receipts $1,908,567,625  09 


APPENDIX  HI. 


521 


ENCE  (David 


575,799,691  04 


The  amount  of  outstanding  indebtedness, 
less  cash  and  sinking  fund  in  treasury, 
June  30,  1869,  was  $2,489,002,480.58. 

Deducting  from  this  the  amount  of  outstand- 
ing indebtedness  at  the  outbreak  of  the 
war  ($76,455,299.28),  we  have,  as  the 
sum  borrowed  for  war  purposes  and  not 
repaid  out  of  the  receipts  above  indicated    12,412,547,181  30 


Making  the  total  expenditure  (loans 
and  receipts)  in  eight  and  a  quarter 
years  of  war  and  its  effects      .     .     . 
Deducting  the  amount  which,  but  for  the 
war,  might  be  taken  as  the  average  ex- 
penditure of  the  government  during  this 
period,  say  $100,000,000  per  annum    .    . 


$4,996,914,498  33 


825,000,000  00 


We  shall  have «i, 171,914,498  33 

which  sum  represents  the  coat  of  the  war  to  the  United  States 
government  down  to  June  30,  1869. 

To  this  sum  should  be  added  the  value  of  the  pensions  now  paid 
by  the  government  on  account  of  the  war,  if  the  same  were  capi- 
talized. This  at  eight  years'  purchase  of  the  present  annual  pay- 
ment, would  amount  to  about  two  hundred  vilUions. 

But  this  aggregate,  however  large,  must  still  furtlier  be  increased 
by  other  items  if  we  would  reach  the  true  cost  of  the  war  to  us  as 
a  people,  the  above  representing  only  the  expenditures  of  the  na- 
tional government. 

These  additional  charges  are  substantially  as  follows:  — 


)08,567,825  09 


Increase  of  State  debts,  mainly  on  war 
account 

County,  city,  and  town  indebtedness  in- 
creased on  account  of  the  war  (estimated) 

Expenditures  of  States,  counties,  cities,  and 
towns,  on  account  of  the  war,  not  rep- 
resented by  funded  debt  (estimated)  .     . 

Estimated  loss  to  the  loyal  States  from  the 
diversion  and  suspension  of  industry,  and 
the  reduction  of  the  American  marine 
and  carrying  trade 1,200,000,000  00 

Estimated  direct  expenditures  and  loss  of 
property  by  the  Confederate  States  by 
reason  of  the  war 2,700,000,000  00 


$123,000,000  00 
200,000,000  00 

600,000,000  00 


; '  I 


'  jl 


622 


ECONOMIC  HISTORY. 


im-'. 


Tliese  estimates,  which  are  believed  to  be  moderate  and  reason- 
abh',  sliow  an  aggregate  destruction  of  wealth,  or  diversion  of  in- 
dustry, wliich  would  have  produced  wealth  in  the  United  States 
since  1861  approximiiting  nine  thousand  millions  of  dollars  —  a 
sum  nominally  in  excess  of  the  entire  increase  of  wealth,  as  re- 
turned by  the  census  for  the  whole  country  from  1850  to  18G0. 

This,  then,  was  the  cost  of  the  destruction  of  slavery;  the  cost 
of  compromise  ;  the  cost  of  the  unfaithfulness  of  those  who 
founded  this  nation  to  the  idea  by  which  the  nation  lives.  What 
does  it  measure?  It  is  substantially  a  thousand  millions  a  year 
for  nine  years;  or  at  the  wages  of  five  hundred  dollars  a  year,  the 
labor  of  two  millions  of  men  exerted  continuously  during  the 
whole  of  that  period.  It  is  tliree  times  as  much  as  the  slave  prop- 
erty of  the  country  was  ever  worth.  It  is  a  sum  which  at  interest 
would  yield  to  the  end  of  time  twice  as  much  as  the  annual  slave 
product  of  the  South  in  its  best  estate. 

*'  The  places  of  those  who  sleep  in  their  graves  have  been  filled 
by  new  laboi-ers;  the  incubus  of  slavery,  which  was  slowly  but 
surely  making  the  fertile  South  a  desert  scorched  as  by  a  consum- 
ing fire,  has  been  removed;  thousands  of  miles  of  new  railroads; 
inventions  never  before  excelled  in  their  labor-saving  character; 
millions  of  acres  of  the  richest  lands  opened  to  settlement,  now 
render  labor  easy  and  product  large."  Without  faltering  and  with- 
out tampering  with  the  public  faith,  it  is  now  the  duty  of  this 
people  to  undertake  the  far  easier  task  of  payment  for  the  service 
already  rendered.  If  we  hesitate  or  falter,  dishonor,  second  only 
to  that  which  tolerated  slavery,  will  overwhelm  the  land,  and  the 
idea  of  a  free  people  governing  themselves  will  become  a  scorn  and 
a  by-word  among  nations. 


PAYMENT  OF  THE  WAR  DEBT. 

From  RKPonr  of  the   Secretary  of  the   Treasury  (Hugh  Mc- 
Cum.och)  1884,  pp.  xxvii-xxix. 


It  is  in  the  highest  degree  gratifying  to  the  Secretary  to  noticq 
the  great  reduction  of  the  public  debt  since  it  reached  its  highest 
point  in  August,  ISfx"),  and  its  continued  reduction  since  his  last 
report,  in  1S08.  The  following  table  exhibits  the  reduction  botli 
of  principal  and  interest:  — 


lJ;  *> 


APPENDIX  III. 

On  August  31,  18C5,  the  iudebteclness  of  the  United  States,  not 
including  bonds  issued  to  the  Pacific  Railroad  Companies,  was  as 
follows :  — 

Debt  bearing  coin  interest $1,108,310,191  80 

Debt  bearing  currency  interest      ....  1,273,220, 10;3  16 

Matured  debt  not  presented  for  payment    .  1 ,503,020  09 

Debt  bearing  no  interest 401,010,311  51 

Total  debt $2,844,649,626  56 

Cash  in  the  treasury 88,218,055  13 


Amount  of  debt  less  cash  in  the  treasury    $2,750,431,571  43 

The  annual  interest  charge  was  $150,977,697.87,  and  the  average 
rate  paid  was  6  yW  P^r  cent. 

On  Nov.  1,  1868,  the  indebtedness  of  the  United  States,  not 
including  bonds  issued  to  the  Pacific  Kailroad  companies  was  as 
follows :  — 

Debt  bearing  coin  interest $2,107,577,950  00 

Debt  bearing  currency  interest     ....  72,325,000  00 

Matured  debt  not  presented  for  payment    .  9,753,723  64 

Debt  bearing  no  interest 409,151,898  42 

Total  debt .^2,598,808,572  06 

Cash  in  the  treasury 113,873,019  24 


Amount  of  debt  less  cash  in  the  treasury    $2,484,935,552  82 

The  annual  charge  was  $126,408,343,  and  the  average  rate  paid 
was  5  ^  per  cent. 

On  Nov.  1,  1884,  the  public  debt  was  as  follows:  — 

Debt  bearing  interest $1,206,475,600  00 

Debt  on  which   interest  has  ceased  since 

maturity 12.517,485  26 

Debt  bearing  no  interest 623,468,436  36 

Total  debt 31,812,491,.521  62 

Cash  in  the  treasury 434,008,572  93 


lllll 


41 


Amount  of  debt  less  cash  in  the  treasury    $1,408,482,948  69 


11 


Si  II 


624 


ECONOMIC  HISTORY. 


Jii 

mm] 


i 


The  annual  interest  charge  is  now  (1884)  047,323,831.60,  and 
the  average  rate  paid  3  ^"1^  per  cent. 


Reduction  of  debt  in  sixteen  years    . 
Reduction  of  annual  interest  charge 
Reduction  of  debt  in  nineteen  years  . 
Reduction  of  annual  interest  charge 


01,076,452,604  13 

79,084,511  50 

1,347,048,622  74 

103,653,806  37 


In  the  management  of  its  debt  the  United  States  has  been  an 
example  to  the  world.  Nothing  lias  so  much  surprised  European 
statesmen  as  the  fact  that  immediately  after  the  termination  of  one 
of  the  most  expensive  and,  in  some  res[)ects,  exhaustive  wars  that 
have  ever  been  carried  on,  the  United  States  should  have  com- 
menced the  payment  of  its  debt  and  continued  its  reduction  through 
all  reverses  until  nearly  one  lialf  of  it  has  been  paid;  that  reduc- 
tion in  the  rate  of  interest  has  kept  pace  with  the  reduction  of  the 
principal;  that  within  a  period  of  nineteen  years  the  debt,  which 
it  was  feared  would  be  a  heavy  and  never  ending  burden  upon  the 
people,  has  been  so  managed  as  to  be  no  longer  burdensome.  It  is 
true  that  all  this  has  been  effected  by  heavy  taxes,  but  it  is  also 
true  that  these  taxes  have  neither  checked  enterprise  nor  retarded 
growth. 


APPENDIX  IV. 


626 


H  has  been  an 
ised  European 
i nation  of  one 
tivo  wars  that 
ihl  have  com- 
iction  through 
1;  that  reduc- 
luction  of  the 
e  debt,  which 
rden  upon  the 
>nsome.  It  is 
but  it  is  also 
e  nor  retarded 


96 


rt  V  1  *  fc  —  I  - 1  -  tc  A  c  '/  X  X  r.  t^  J 1  i  5i  --  S  ^  ?i  2  to  I  -  ti «?  'JS    ^  ?j 
V  —  -  Cl  J»  O  X  V  Ji  ™  -»;i  -  r-.  I-  ?5  54*1  f-i  51  *  i-  ^>  o\^  »c  c  'f  fi     5  H 

•fri'  -f*'  ^"^irf  :d  M  X£i  Lt  ^  r*  TC  if  to  o>  c4"o*  go  1-  -'''^'  t*     w  t-'p-TpH    2  ^* 


«  u-5 c*  i.-^'iC  lO of  r^^cS .-*  '^.el©  '*," "^ c% ift cc ^^t  ^ 


Si 


a  «« 


J 


e    .  a 
1.1^ 


<s  ■£  a  _  „- 
■=  «  T,  B  a 


aj  »> 


a  a 
3 


"5 


21 

Is 


S2     S 


«5S  •§f2 


J -J 


I  I 

a 


3|li 
0.S2  < 

I   I    I 

i 


:-E.5 

wa 


O  c  3 

I  I  I 
a 


B  s  I  ^  -a  s^*  ■J  X 
i   llillslii 

I   I   I   I    I  O  cS  2  (S  a 

I  I  M  ;° 


'3 
§ 
S. 

i-3 
•SS 

V,  * 


•a 

a 

■  Id 


■  a 

9 

1^ 


f  i  ^  tc 

!«i5  00 

I   I  a  a 


1   ■" 


'^  Si' 


!   5j3 


jl 
I 

1 

I 


ii 


526 


ECONOMIC  HISTORY. 


V. 


THE  UNITED  STATES  IN  1890. 


THE  rOPULATION  OF  THE  UNITED  STATES,   1890. 

RODKKT    P.    POIITKU. 

[Eleventh  Census  Bulletin,  No.  16,] 

Thk  population  of  the  United  States  on  June  1,  1890,  as  shown 
by  the  final  count  of  persons  and  families,  exclusive  of  white  per- 
sons in  Indian  Territory,  Indiana  on  reservations,  and  Ahuska,  was 
&2,{S'2'2^'2'A);  including  these  persons  the  population  will  jtrohably 
reach  in  round  numbers  0;i,()00,000.  In  1880  the  population  was 
50,155,78.'^.  The  absolute  increase  of  the  population  in  the  ten 
years  intervening  was  12,4(5(),4G7,  and  the  percentage  of  increase 
was  24.86.  In  1870  the  population  was  stated  as  38,558,371. 
According  to  these  figures  the  absolute  increase  in  the  decade  be- 
tween 1870  and  1880  was  11,597,412,  and  the  percentage  of  in- 
crease was  30.08. 

UjMin  their  face  these  figures  show  that  the  population  has  in- 
creased between  1880  and  1890,  869,055  more  than  between  1870 
and  18(S0,  while  the  rate  of  increase  has  apjiarently  diminished 
from  30.08  to  24.86  per  cent.  If  these  figures  were  derived  from 
correct  data,  they  would  be  disappointing.  Such  a  reduction  in  the 
rate  of  increase  in  the  face  of  the  heavy  immigration  during  the 
past  ten  years  would  argue  a  diminution  in  the  fecundity  of  the 
population  or  a  corresponding  increase  in  its  death  rate.  TJu-ne 
figures  are,  however,   easily  explained  when  the  oharn'  il 

data  used  is  understood.     It  is  well  known,  the  t;<'f 
demonstrated  by  extensive  and  thorough   in'  th 

census  of  1870  was  grossly  deficient  in  the  Sout  State.-.        uucl 

80  as  not  only  to  give  an  exaggerated  rate  of  intjtftse  of  the  popu- 


APPENDIX  r. 


627 


liition  l)ot\vpen  1870  ami  1880  ia  tliose  States  b«it  to  ftffoct  very 
niatt'riiill}'  tlio  rato  of  iiicn-asf  in  tliu  country  at  large.   .   .   . 

It  is  fair  to  uHsunio  tliat  tlie  rates  of  inrrcasc  of  population  of 
tlio  Southern  States  between  1800  and  1870  and  between  1870  and 
1880  were  related  to  one  anotlier  in  a  proportion  similar  to  tlio  cor- 
respondin^j  rales  in  tho  Northern  States  during;  the  same  jieriods. 
In  tho  term  "Southern  States"  is  here  included  tlio  two  Virj^iniaa, 
tho  two  Carolinas,  Georgia,  Florida,  Alabama,  Mifsissippi,  Louisi. 
ana,  Texas,  Arkansas,  Tennessee,  and  Kentucky.  Tlio  census  of 
1870  is  known  or  ia  suspected  to  bo  deficient  in  all  tlieso  States. 
In  tho  other  States  and  Territories  there  is  no  suspicion  of  incom- 
pleteness. Tiio  poj)uliition  of  tho  Southern  Statea  in  1800,  1870, 
and  1880,  was  as  follows :  — 

1800 10,250.018 

1870 11,250,411 

1880 16,257,303 

The  population  of  tho  other  States  and  Territories  in  18G0,  1870, 
and  1880,  was  as  follows :  — 

18(10 21,184,305 

1S70 27,307,900 

1880 34,808,390 


hi  ■     <•■ 


';      l.i,  . 

m 


Tho  rate  of  increase  in  these  other  States  and  Territories  waa 
28.9  per  cent  between  18G0  and  1870,  and  27.8  per  cent  between 
1870  and  1880.  These  two  rates  are  so  nearly  equal  that  in  ex- 
tending  them  to  the  Southern  States  they  may  be  regarded  as  iden. 
tical;  in  other  words,  it  may  be  as.sumed  that  the  rate  of  increase 
in  tho  Southern  States  between  18G0  and  1870  and  between  1870 
and  1880  were  tho  same. 

Classified  as  white  and  colored,  the  population  of  the  Southern 
States  was  as  follows :  — 


Year. 


1800 
1870 
1880 


White. 


6,300,70."] 
7,067.213 
0,592.568 


Colored. 


3,890,037 
4,179,222 
6,657.035 


ii: 


111 


i! 


528  ECONOMIC  HISTORY. 

The  increase  of  the  white  between  1860  and  1880  was  50.67  per 
cent,  or  at  a  uniform  rate  for  each  ten  years  of  22.75  per  cent. 
The  increase  of  the  colored  between  1860  and  1880  was  45.43  per 
cent,  or  at  the  rate  of  20.6  per  cent  for  each  ten  years.  Applying 
these  rates  of  increase  respectively  to  the  white  and  colored  popu- 
lation in  1860  there  results  as  the  approximate  white  population  in 
1870,  7,815,128  and  for  the  colored,  4,691,385.  These  results  are 
in  excess  of  the  figures  as  returned  by  the  census  of  1870,  in  the 
case  of  the  white  747,915,  and  in  the  case  of  the  colored  512,163, 
a  total  of  1,260,078,  which  may  be  assumed  as  approximately  the 
extent  of  the  omissions  by  the  faulty  census  of  1870.  The  total 
population  in  1870  was,  therefore,  apijroximately  39,818,449,  in- 
stead  of  38,558,371. 

Assuming  these  figures  to  represent  approximately  the  true  pop. 
ulation  in  1870,  the  rates  of  increase  would  stand  as  follows :  — 

Per  ccDt. 

1860.     31,443,321 

1870.     39,818,449 26.6 

1880.     50,155,783 25.9 

1890.     62,622,250 24.8 

Omitting  from  consideration  those  States  in  which  the  census  of 
1870  is  known  or  is  presumed  to  have  been  faulty,  the  rate  of  in- 
crease between  1870  and  1880  in  the  remaining  States  has  been 
very  nearly  maintained  in  the  decade  between  1880  and  1890. 

POPULATION    OF    UNITED    STATES    IN    1870,   1880,  AND  1890  BY 
GEOGUAPIIICAL  DIVISIONS. 


GiooRAPBicAL  Divisions. 

POPDLAIIOH. 

1  iHCREAIIt 
FROM  1880 

TO  1890. 

iNrRKASK 
FROM  1870 

10  1880. 

IRCRKASI 
FRUM  1860 

10  1870. 

1S90. 

1880. 

1870. 
38,658,371 

Per  cent. 

Per  cent. 

Per  cent. 

The  United  States  .    . 

02,622,250 

60,166,783 

24,86 

80.08 

22,63 

North  Atlantic  dlTiatnn  . 

17,401,646 

14,607,407 

12,298,730 

19.05 

17.96 

10.09 

South  Atlantic  diTlsion  . 

8,867,920 

7,597,197 

6,868,610 

16.59 

29,79 

911 

North  Central  diTlilon  . 

22,3«2,270 

17,804,111 

12,981,111 

28.78 

88,78 

42.70 

South  Central  dIvi»lon  . 

10,972,898 

8,919,871 

6,434,410 

23.02 

88,02 

11,64 

Weitem  diTision  .    .    . 

8,027,61i 

1,767,697 

990,510 

7127 

78.48 

80.03 

APPENDIX  V. 


529 


18  60.67  per 
5  per  cent. 
IS  45.43  per 

Applying 
lored  popu- 
)pulation  in 
3  results  are 
L870,  in  the 
•ed  512,163, 
Liniately  the 

The  total 
818,449,  in. 

le  true  pop- 
llows :  — 
Per  cent 

.  26.0 
.  25.9 
.     24.8 

he  census  of 
e  rate  of  in- 
es  has  been 
11890. 

ND  1890  BY 


IKASC 

1  1870 
1880. 

IlfCHIASI 
FRUM  1860 

TO  1870. 

cent. 

Per  cent. 

008 

22.63 

7.96 

10.09 

9.79 

911 

3.76 

42.70 

S.C2 

ll.M 

9.40 

60.03 

IRON    AND    STEEL    INDUSTRIES. 

IRON-ORE  MINING  INDUSTRY. 

John  Birkinbine. 
[Eleventh  Census  Bulletin,  Xo.  113.] 

During  the  year  ended  Dec.  31,  1889,  the  production  of  iron 
ore  amounted  to  14,518,041  long  tons,  which  was  contributed  by 
twenty-six  States  and  two  territories,  and  this  output  represented 
a  value  on  cars  or  carts  at  the  mines  of  «$33,351,978,  an  average  of 
$2.30  per  ton. 

The  stock  of  ore  on  hand  at  the  commencement  of  the  census 
year  was  1,966,824  long  tons,  while  at  its  close  this  amount  was 
augmented  to  2,256,973  tons,  an  increase  for  the  entire  country  of 
290,149  tons,  or  nearly  15  per  cent.  The  stoc'.;  of  iron  ore  carried 
over  is  equivalent  to  15.65  per  cent  of  the  production  for  the  census 
year,  but  the  increased  stock,  that  is,  the  amount  of  ore  rained 
but  not  consumed,  represents  but  2  per  cent  of  the  total  output 
for  1889.  Owing  to  the  fact  that  the  census  year  for  mining  cor- 
responded with  the  calendar  year  1889,  the  stocks  of  iron  ore  on 
hand  at  the  commencement  and  end  of  the  year  represented  a 
larger  amount  than  would  have  been  the  case  a  few  months  earlier, 
the  practice  of  mine  managers  whose  products  must  reach  a  market 
by  means  of  water  transportation  encouraging  a  depletion  of  stock 
at  the  mines  during  the  shipping  season  and  an  augmentation  dur- 
ing the  winter  months,  when  navigation  is  suspended.   .   .   . 

Michigan  was  by  far  the  large.st  producer  of  iron  ore  in  the 
census  year  1889,  a  total  of  5,856,169  long  tons  having  been  mined, 
tlie  value  of  which  was  .1*15,800,521  at  the  mines,  an  average  of 
.■$2.70  per  ton.  The  tonnage  from  IVIichigan  therefore  represents 
40.34  per  cent  of  the  total,  wliile  the  aggregate  value  is  47.38  per 
cent  of  that  of  the  entire  country. 

The  credit  of  holding  second  rank  lies  between  the  States  of  Ala- 
bama and  Pennsylvania,  the  former,  from  the  figures  collected,  hav- 
ing apparently  a  slightly  greater  output  than  the  latter.  This 
uncertainty  is  owing  to  the  fact  that  the  reports  obtained  from  two  of 

84 


IM 


i,., 


'i 


530 


ECONOMIC  HISTORY. 


the  larger  Alabama  mines  covered  operations  commencing  May  1, 
1889,  and  ending  May  1,  1890,  and  no  detailed  record  of  the 
amount  of  ore  produced  and  labor  employed  during  the  three 
months  of  1890  was  obtainable.  The  position  of  Pennsylvania  is 
also  affected  by  the  refusal  of  one  large  producer  to  supply  absolute 
figures;  but  it  will  be  noted  that  in  the  shipments  or  apparent  con. 
sumption  of  iron  ores  Pennsylvania  takes  precedence  of  Alabama. 

Alabama  is  therefore  placed  second  as  a  producer  of  iron  ore, 
with  1,570,319  long  tons,  valued  at  $1,511,611,  an  average  of  90 
cents  per  ton.  These  figures  represent  10.82  and  4.53  per  cent, 
respectively,  of  {he  total  output  and  value. 

Pennsylvania  closely  follows  Alabama,  its  output  being  1,560,234 
long  tons,  valued  at  $3,063,534,  an  average  of  $1.96  per  ton,  and 
10.76  and  9.19  per  cent,  respectively,  of  the  total  output  and 
value. 

The  other  State  which  produced  over  1,000,000  tons  in  the  pres- 
ent census  year  was  New  Yc.k,  which  is  credited  with  1,247,537 
long  tons,  valued  at  $3,100,216,  an  average  of  2.49  per  ton,  the 
figures  representing,  respectively,  8.69  and  9.30  per  cent  of  the 
total  output  and  value. 

These  four  States  therefore  produced  a  total  of  10,234,259  long 
tons,  or  70.49  per  cent  of  the  entire  output  of  the  iron-ore  mines 
of  the  United  States,  while  the  value  of  the  ore  aggregates 
$23,476,882,  or  70.39  per  cent  of  the  total  valuation.  .  .  . 

Although  the  iron  ores  of  the  United  States  are  very  liberally 
distributed,  the  production  in  the  year  1889  came  from  compara- 
tively limited  areas.  This  statement  will  be  made  more  prominent 
by  taking  the  output  of  various  sections  of  the  country  for  this 
purpose. 

If  the  United  States  be  divided  into  eastern  and  western  sec- 
tions by  the  most  prominent  physical  feature,  namely  the  Missis- 
sippi River,  and  connecting  the  headwaters  of  this  stream  by  an 
imaginary  line  with  the  Lake  of  the  Woods,  the  output  of  that 
portion  of  the  United  States  east  of  this  division  in  1889  was 
14,043,782  long  tons,  or  96.73  per  cent  of  the  total  production  of 
the  United  States,  and  that  of  the  western  division  474,259  long 
tons,  or  3.27  per  cent.  If  the  eastern  division  is  again  subdivided 
by  a  lino  nearly  east  and  west,  following  the  Ohio  and  Potomac 
rivers,  uniting  these  along  the  southern  boundary  of  Pennsyl- 
vania, the  northern  portion  produced  11,153,282  long  tons  in  1889, 
or  79.42  per  cent  of  the  output  of  the  eastern  division  and  76.82 


APPENDIX  V. 


681 


per  cent  of  the  total  for  the  United  States,  and  the  southern  portion 
2,890,500  long  tons,  or  20.58  percent  of  the  product  of  the  eastern 
division  and  19.91  per  cent  of  the  total  for  the  United  States. 

Adding  to  the  stock  of  iron  ore  on  hand  Jan.  1,  1889,  1,966,824 
long  tons,  the  production  for  the  year,  14,618,041  tons,  and  de- 
ducting the  stock  on  hand  Jan.  1,  1890,  2,256,973  long  tons,  there 
is  an  apparent  total  consumption  of  14,227,892  tons,  valued  at 
$32,766,506.  To  this  apparent  consumption,  however,  should  be 
added:  (1)  the  materials  which  are  charged  into  blast  furnaces  as 
ore,  but  which  are  products  coming  from  the  puddling  and  heating 
furnaces  and  the  rolls  and  hammers  of  rolling  mills;  (2)  the 
materials  from  the  retorts  in  which  the  franklinite  of  New  Jersey 
is  treated  for  the  removal  of  zinc,  leaving  as  a  residuum  a  mixture 
of  iron  and  manganese  oxides,  employed  in  blast  furnaces  for  pro- 
ducing spiegeleisen;  and  (3)  the  blue  billy  or  purple  ore,  the  re- 
siduum of  pyrites  burned  to  produce  sulphuric  acid,  and  some  of 
the  silicates  of  iron,  which,  as  cinder,  result  from  the  treatment  of 
copper  ores,  may  also  be  utilized  and  smelted  as  iron  ores. 

The  following  resum^  illustrates  the  apparent  consumption  of 
iron  ore  and  materials  used  as  iron  ore  in  the  year  1889 :  — 


APPROXIMATE  CONSUMPTION  OF  IRC;  ORE,  ETC.,  BY  VARIOUS 

INDUSTRIES  IN   1889. 

[Long  tons.] 


Itemi. 

Total. 

1      Used  in 
IRnlllug  Mills, 
Forges,  etc. 

Used  In 

Silver 
Smelting. 

Used  in 

Illiut 
Furniices. 

Total 

15,7.3.'3,405 

424,600 

157,008 

16,151,057 

Domestic  iron  ore  .... 

Foreign  iron  ore     .... 

Mill  cinder,  scale,  residuum, 
blue  billy,  etc 

14,227.892 
863,573 

652,000 

417,000 
7,500 

157,008 

13,652,984 
846,073 

652,000 

i 

Comparing  tli»  figures  for  the  census  year  ended  Doc.  31,  1889, 
with  the  census  year  1880,  it  is  found  that  a  totJil  of  7,120,362 
long  tons  of  ore  were  mined  in  1880,  valued  at  $23,156,957,  while 
the  production  of   the  census  year  1889  shows  a  total  output  of 


532 


ECONOMIC  HISTORY. 


14.618,041  long  tons,  valued  at  $33,351,978,  an  increase  of 
7,397,679  long  tons,  or  103.89  per  cent,  over  the  production  of 
IHcSO,  and  an  augmented  value  of  $10,195,021,  or  44.03  per  cent. 

The  average  value  per  ton  of  iron  ore  at  the  mines  haa  been  re- 
<luced  from  $3.25  per  long  ton  in  1880  to  $2.30  per  ton  in  1889. 
This  is  due  to  the  consolidation  of  a  number  of  mines  which  liavo 
been  grouped  under  one  management,  reducing  the  cost  of  sui)erin- 
tcndence,  ofHce  force,  administration,  etc.,  encouraging  the  use  of 
improved  machinery  and  permitting  systematic  and  advancHjd  meth- 
ods of  mining,  greatly  increasing  the  output  of  the  mines.  Tlie 
reduced  freight  rates,  due  to  improved  facilities,  shijiping  and  re- 
ceiving docks,  special  vessels  and  cars  having  been  built  for  ore. 
handling  and  transportation,  render  the  comi)etition  between  the 
mines  much  keener  than  in  1880.  The  low  co.st  of  mining  ore  in 
the  Southern  States  has  also  contributed  to  this  diminution  of  value 
at  the  mines. 

Iron  ore  was  obtained  from  twenty-throe  States  in  1880,  and  all 
(if  these  States,  with  the  exce])tion  of  Indiana  and  Vermont,  were 
prixhu'ers,  as  reported  to  the  Eleventh  Census.  In  addition  to  the 
States  which  mined  ore  as  reported  to  the  Tenth  Census,  there  are 
added  Colorado,  Idaho,  Minnesota,  Montana,  New  Mexico,  Utah, 
and  AVashington  as  new  producers  for  the  Eleventh  Census.  t)f 
these,  Colorado  and  Minnesota  were  the  only  States  which  contrib- 
ute<l  largrly  to  the  output  of  1889.   .   .   . 

Tlie  total  value  of  the  iron-ore  mines  of  the  United  States  Dec. 
31,  1889,  was  $109,7(;(>,199,  as  against  $(>!, 782,287  invested  in 
1880  in  regular  mining  establishments,  an  increase  of  $47,983,912, 
or  77.07  jier  cent. 

The  State  of  Mi<higan  has  advanced  from  second  place  in  1880, 
with  a  total  re] orted  investment  of  $17,490,775,  to  first  jiosition 
in  1889,  with  an  investtiu'iit  of  $41,958,571,  an  increase  of 
$24,401,79().  or  nearly  140  per  cent,  or  38.23  per  cent  of  tiie  total 
capital  used  in  iron  ore  mining  for  the  United  States. 

Pennsylvania  occujiies  second  place,  with  a  valuation  of  $10,- 
249.31.3,  or  14.80  ].er  cent  of  the  total,  a  decrease  of  $1,372,388. 
or  7.79  per  cent  from  the  1880  valuation  of  $17,()21,701,  when  it 
occupied  tirst  plai-e. 

New  York  follows  next,  occiipying  the  same  relative  rank  as  in 
1880,  with  $12,4S9.4^1,  or  11..3S  jn'r  cent  of  the  total  valuation 
for  the  U^nited  States,  in  increase  in  capital  of  $4,220,342,  or 
51.15  per  cent. 


APPENDIX  V. 


i33 


Minnesota,  which  produced  no  ore  in  1880,  Aliihama,  Mis- 
souri, and  Wisconsin,  follow  in  the  order  named,  the  last  three 
occupying,  respectively,  ninth,  fifth,  and  fourteenth  places  in 
1880. 

The  valuation  of  the  iron-ore  mines  of  the  above  seven  States  as 
reported  is  $93,422,218,  or  85.11  per  cent  of  the  total  capital  in- 
vested in  ore  mining.   .  .  . 

The  returns  recorded  show  that  the  mining  of  iron  ore  gave  em- 
ployment directly  to  38,227  persons,  an  increase  of  G,u59  men,  or 
20.71  per  cent,  over  the  Tenth  Census,  when  the  number  was 
31,GG8  engaged  in  work  connected  with  breaking  down  and  raising 
the  ore  and  delivering  it  in  cars  or  carts  or  on  stock  piles  at  the 
mines.  This  force  was  divided  as  ftdlows:  1,3G()  foremen  (GSOem- 
plo^-od  above  and  G86  below  ground),  2,071)  mechanics,  12,432 
miners,  21,010  laborers  (14,531  above  and  G,479  below  grouiul), 
820  boys  (709  being  employed  above  and  111  below  ground),  and 
520  men  in  offices.  Omitting  the  latter,  the  total  number  act- 
ually employed  in  handling  the  ore  was  37,707,  and  the  aniount 
paid  in  wages  direct  to  miners  and  contractors  reached  a  total  of 
$15,458,118.  This  would  show  an  average  earning  capacity  for 
each  man  employed  of  $409.95  per  annum,  and  includes  the  con- 
tractitrs'  profits  and  the  additional  pay  allowed  to  foremen.  This  is 
an  increase  over  the  figures  for  1880  of  $101.01,  or  32.70  per  cent, 
which  is  due  principally  to  the  fact  that  a  larger  number  of  the 
mines  are  now  under  ground,  permitting  tiie  men  to  be  constantly 
employed  throughout  the  year  and  demanding  better  skill. 

The  lowest  expenditure  for  Is  bor  per  ton  of  ore  was  in  the  States 
of  Alabama  and  Georgia  and  North  Carolina,  where  it  amounted  to 
G9  and  71  cents  per  ton,  respectively,  due  to  large  open  workings 
and  modern  and  systematic  systems  of  mining,  and  in  Alabama 
aiui  Georgia  to  the  soft  character  of  the  ore,  etc. 

In  Pennsj'lvania  one  half  of  the  iron  ore  credited  to  the  State 
c(mu's  from  the  Cornwall  ore  hills,  where  tlie  soft  character  of  tin- 
ore  and  its  accessibilitj'  assist  in  reducing  the  average  cost  of  labor 
employed  in  mining  for  the  entire  State  to  75  cents  per  long  ton. 
The  cost  of  nuning  the  hard  Lake  Superior  ores  is  best  illustrated 
in  the  State  of  Michigan,  wliere  81.19  was  expended  for  wages  per 
ton  of  ore  won.  The  high  cost  in  Colorado,  Idaho,  and  Montana  is 
due  to  the  higher  rates  of  wages  prevailing  in  those  States  and  the 
small  amount  of  ore  won. 

In  the  New  England  States,  New  Jersey,  Ohio,  Delaware,  and 


\m 


ilil 

I'lliii! 


ilililii! 


ill 


584 


ECONOMIC  HISTORY. 


Cf'- 


'■\(' 


ii.it*--' 


Miirylaiul  tlie  exploitation  of  old  workings  or  of  scattered  di-posita 
causes  a  high  cost  per  ton  for  wages.  The  use  of  improved  ma- 
cliinery  and  the  predominance  of  large  mines  assist  in  reducing  the 
cost  for  labor  in  Wisconsin,  Minnesota,  Alabama,  New  York,  and 
other  States.  The  partial  employment  of  convicts  in  Tennessee, 
Texas,  and  Georgia,  affects  the  figures  for  these  States. 

Michigan,  as  the  largest  producer,  naturally  gives  employment  to 
the  greatest  number  of  persons,  namel}',  13,120,  or  34.32  per  cent 
of  all  the  employes  at  the  mines  of  the  United  States;  Pennsyl- 
vania follows  with  4,410  employees,  or  11.54  per  cent;  New  York 
ranks  third,  its  iron-ore  mining  industry  giving  employment  to 
3,178  persons,  or  8.31  per  cent  of  the  total  number  of  employ«5s; 
and  Alabama  occui)ies  fourth  ])lace,  which'State  reported  a  total  of 
3,122  employes,  or  8.17  per  cent.  These  four  States  had  23,830 
persons,  or  02.34  per  cent  of  tiie  total,  employed  in  their  iron-ore 
mines. 

Alabama  returns  the  largest  output  per  employe,  Minnesota, 
Wisconsin,  Miciiigan,  New  York,  Missouri,  Pennsylvania,  Georgia 
and  North  Carolina,  Tennessee,  Colorado,  New  Jersey,  Virginia 
and  West  Virginia,  and  Ohio,  following  in  the  order  named. 

The  total  cost  of  the  ore  mined,  as  represented  by  schedules  re- 
turned, aggregates  $24,781,()a8,  e(juivalent  to  an  average  cost  of 
$1.71  per  ton  of  ore  mined  against  $2.21  in  1880,  a  decrease  of 
$0.50  per  ton,  or  22.G2  per  cent.  The  difference  includes  more 
than  supplies  and  materials.  These  figures  indicate  the  advance 
made  in  labor-saving  appliances  and  improved  facilities  for  mining 
and  handling  the  product  of  the  mines. 

In  the  total  cost  of  producing  iron  ore  Alabama  is  the  only  State 
which  averages  less  than  .i^l  jter  ton,  namely,  82  cents.  Next  in 
order  of  low  cost  come  Texas,  $1.05;  Tennessee,  $1.08;  Pennsyl- 
vania, $1.10;  Georgia  and  North  Carolina,  $1.14.  In  Colorado 
the  cost  of  producing  one  long  ton  of  ore,  $3.4i),  is  greater  than  in 
any  other  Statu. 


•:4  /flii 


■WV:'M:V 


APPENDIX  V. 


686 


PRODUCTION  OF  PIG-IRON. 

William  M.  Sweet. 

[Eleventh  Census  Bulletin,  No.  0.] 

The  production  of  pig-irou  during  tlio  year  ended  June  30,  1890, 
was  tho  largest  in  the  history  of  the  iron  industry  of  this  country, 
amounting  to  9,579,779  tons  of  2,000  pounds,  as  compared  with 
3,781,021  tons  produced  during  the  census  year  1880,  and  2,052,821 
tons  during  the  census  year  1870.  From  1870  to  1880  the  increase 
in  production  amounted  to  1,728,200  tons,  or  nearly  85  per  cent, 
while  from  1880  to  1890  the  incretise  was  5,798,758  tons,  or  over 
153  per  cent.  The  following  table  shows  the  production  of  pig- 
iron  in  tho  various  sections  of  the  country  in  the  census  years  1870, 
1880,  and  1890,  in  tons  of  2,000  pounds,  including  castings  made 
direct  from  the  furnace.  The  statistics  for  1870  and  1»&0  are  for 
the  census  years  ended  May  31,  but  for  1890  they  cover  the  year 
ended  June  30. 


Mi  Ml 


I 


DinsioTS. 


New  England  States 
Middle  States  .  .  . 
Southern  States  .  . 
Western  States  .  . 
Far  Western  States  . 


Totol 


ToNf  OF  2,000  PooiiDa. 


Year  endwl 
Msy  31,  1870. 


34,471 

1,311,040 

184,540 

522,161 


2,0.J2,821 


Tear  ended 
MaySl,  I8bv 


30,967 

2,401,093 

350,436 

005,.'J;}6 

3,200 


3,781,021 


Tear  ended 
June  30, 1880. 


a3,78l 
5,210,591 
1,780,909 
2,522,351 

20,147 


9,570,77!> 


I:  •:  i 


From  the  above  it  will  be  seen  that  the  |)ig-iron  industry  of  New 
England  has  been  practically  stationary  during  the  past  twenty 
years,  while  during  the  same  period,  and  especially  since  1880, 
there  has  been  a  womlerful  development  of  the  manufacture  of 
pig-iron  in  all  other  sections  of  the  country. 


mil 


636 


ECONOMIC  HISTORY. 


Sk 


The  relative  rank  of  the  various  States  is  seen  to  have  undergone 
many  changes  since  1880.  Pennsylvania  still  retains  its  lead<.'i- 
ship  as  the  producer  of  about  one  half  of  the  pig-iron  that  is  an- 
nually made  in  the  United  States,  producing  51  per  cent  of  the 
total  production  in  the  census  year  1880,  and  over  49  per  cent  in 
1890.  Ohio  was  second  in  rank  in  both  1880  and  1890,  the  output 
of  pig-iron  in  the  former  year  being  over  14  per  cent  of  the  total 
production  in  the  United  States,  and  in  the  latter  year  over  13  pur 
cent.  Alabama,  which  occupied  tenth  place  in  1880,  with  an  out- 
put of  G2,3'^C  tons,  is  now  the  third  largest  producer  of  pig-iron, 
the  production  of  this  State  in  1890  amounting  to  890,431i  tons, 
an  increase  of  more  than  1,328  per  cent  over  the  production  of 
1880.  Illinois,  which  was  seventh  in  rank  in  1880,  is  fourth  in 
1890,  and  New  York,  which  was  third  in  1880,  occupies  fifth  place 
in  1890.  Virginia,  which  was  seventeenth  in  rank  in  1880,  is  now 
sixth;  while  Tennessee  has  gone  from  thirteenth  to  seventh  place. 

Notwithstanding  the  fact  that  the  i)roduction  of  pig-iron  has  in- 
creased from  3,781,021  tons  of  2,000  pounds  in  1880  to  9,579,779 
tons  in  1890,  the  total  number  of  comi»leted  furnaces  has  decreased 
during  the  ten  years  from  C81  to  5G2. 

Of  the  5(52  coni[)leted  furnaces  at  the  close  of  the  census  year 
1890  there  were  338  in  blast,  of  which  110  were  anthracite  or  an- 
thracite and  coke  furnaces,  1G5  coke  and  bituminous  coal  furnaces, 
and  63  charcoal  furnaces.  The  number  of  furiuices  building  at  the 
date  mentioned  was  39,  of  which  9  were  in  Virginia,  7  in  Alabama, 
6  in  Pennsylvania,  4  in  Illinois,  3  each  in  Kentucky,  Tennessee, 
and  Michigan,  2  in  Maryland,  and  1  each  in  Georgia,  Ohio,  and 
Wisconsin. 

One  of  the  most  noticeable  features  in  the  growth  of  the  manu- 
facture flf  pig-iron  in  this  country  during  the  past  decade  is  the 
development  of  the  blast-furnace  industry  of  the  Southern  States. 
In  1880  the  South  had  already  commenced  to  api)reciate  the  value 
of  the  extensive  deposits  of  iron  ore  and  coal  within  her  borders 
and  to  realize  the  superior  advantages  which  she  possessed  for  the 
cheap  production  of  pig-iron,  owing  to  the  close  proximity  to  each 
other  of  these  materials,  and  a  number  of  large  coke  furnaces  were 
built  in  that  year  and  the  few  succeeding  years.  The  greatest 
activity,  however,  in  undertaking  new  furnace  plants  was  in  1887, 
during  which  year  5  new  furnaces  were  blown  in  and  25  others 
were  under  construction.  There  has  been  but  little  abatement  in 
this  activity  to  the  present  time. 


APPENDIX  V. 


637 


The  greatest  activit}'  in  the  develojunent  of  the  Southern  pig- 
iron  industry  during  the  \y,\nt  decade  was  in  Ahibania.  This  State 
produced  in  the  census  year  181K),  one  lialf  of  all  the  pig-iron  n»a<le 
in  the  South,  and  was  only  exce»'ded  in  production  in  the  United 
States  by  Pennsylvania  and  Ohio.  Virginia  and  Tennessee  now 
occui)y)  respectively,  second  and  third  places  among  the  pig-iron 
j»roducing  States  of  the  South.  Prior  to  the  census  year  1890 
Tennessee  was  the  second  leading  manufacturer  of  pig-iron  in  that 
.section,  but  the  activity  which  has  been  noticeable  during  the  past 
few  years  in  Virginia,  in  the  erection  of  new  furnaces  has  placed 
this  Stiite  next  to  Alabama  among  Southern  States  in  the  ipiantity 
of  pig-iron  jtroduced.  In  IS.SO,  West  Virginia  was  the  leading 
producer  of  pig-iron  in  the  South,  but  in  181K)  it  was  fourth  in 
rank.  The  manufacture  of  pig-iron  in  Kentucky  and  Georgia  has 
been  practically  stationary  during  the  past  decade,  and  j>rior  to  the 
census  year  IS'.K)  but  little  progress  had  been  made  by  Texas.  Two 
charcoal  furnaces  were  building  in  that  State  in  the  census  year 
1890,  both  of  which  were  completed  but  not  blown  in  at  the  close  of 
that  year.  All  of  the  furnaces  in  North  Carolina,  seven  in  num- 
ber, were  idle  in  1880,  and  since  that  year  very  little  activity  has 
been  shown  in  tlie  erection  of  new  works,  while  the  seven  furnaces 
referre«l  to  have  either  been  abandoned  or  are  now  classed  as  long- 
inactive  furnaces.  With  the  exception  of  West  Virginia  and 
Maryland,  nearly  all  the  pig-iron  made  in  the  South  is  produced 
from  southern  ores,  and  of  the  quant  it}'  produced  by  the  use  of 
mineral  fuel,  much  the  larger  part  is  made  from  southern  coke. 
Most  of  the  pig-iron  made  in  West  Virginia  is  produced  from  Lake 
Superior  ores.  In  Maryland  the  recent  building  of  four  large 
coke  furnaces  by  the  I'ennsylvania  Steel  Company,  at  Sparrow's 
Point,  near  Haltimore,  to  smelt  iron  ores  from  Cuba,  has  suddenly 
brought  this  State  more  prominently  forward  as  a  manufacturer  of 
pig-iron.  Two  of  the  furnaces  were  blown  in  during  the  census 
year  1890,  and  of  the  other  two,  one  is  comjjleted  and  ready  for 
operation.  .  .   . 

The  following  table  shows  the  production  of  ]>ig-iron  in  the 
United  States,  in  tons  of  L',000  jiounds,  in  the  census  years  1880 
and  1890,  arranged  according  to  the  fuel  iised,  with  the  percentage 
of  increase  or  decrease  in  production  in  1890;  — 


i^il 


588 


ECONOMIC  IIISTOnr. 


Fuol  Uaad. 


Anthracite  alone 

Mixed  anthracite  coal  and  coke, 
Coke  and  bituiiiiiiuUH  cual      .    . 

Cliurcoal 

Castings  direct  from  furnace 


Total 


Year  *nd«il 
Hay  81, 1880. 


Torn. 

1,112.7;)5 
71.1,932 

1,615,107 

436,018 

4,220 


3,781,021 


Yunr  anded 
Jaue80,18U0. 

I'crrentag* 

of  liiaraoM 

tDl8»0. 

Tom. 

823,258 
l,H7'J,0(t8 
0,711,974 

655,620 
0,929 

163.20 

848  00 

fiO.flO 

184.78 

0,670,779 

163.36 

ParcanUn* 

of  Decraiua 

Id  1880. 


70.06 


The  foregoing  figures  clearly  exhibit  the  important  part  that 
bituminous  coal  and  coke  have  taken  in  the  growth  of  the  pig-iron 
industry  since  1880.  The  larger  proportion  of  the  production  of 
pig-iron  credited  to  these  fuels  is  made  from  coke  alone.  A  few 
furnaces  use  raw  bituminous  coal  only,  and  their  production  is 
included  in  the  total  for  coke  and  bituminous  coal.  In  the  use 
of  anthracite  coal  alone  as  a  blast-furnace  fuel  there  is  seen  to 
have  been  a  marked  decrease  since  1880,  while  the  production  of 
pig-iron  with  mixed  anthracite  coal  and  coke  has  more  than 
doubled.  .  .  . 

PRODUCTION  OF   STEEL. 


William  M.  Sweet. 
[Eleventh  Census  Bulletin,  No.  13.] 

The  total  production  of  steel  in  the  United  States  in  the  form  of 
ingots  or  direct  castings  during  the  year  ended  June  30,  1890, 
amounted  to  4,406,920  tons  of  2,000  poumls,  as  compared  with 
1,145,711  tons  produced  during  the  year  ended  May  31,  1880;  an 
increase  of  3,321,215  tons,  or  290  per  cent. 

The  following  table  gives  the  production  of  the  various  kinds  of 
steel  in  the  form  of  ingots  or  direct  castings  in  1880  and  1890. 
The  statistics  for  1880  are  for  the  census  year  ended  May  31, 1880, 
but  for  1890  they  cover  the  fiscal  year  ended  June  30,  1890.  A 
few  steel  works  produce  blister,  cemented,  and  other  miscellane- 
ous steel,  but  the  quantity  made  annually  is  very  small,  and  the 
statistics  thereof  for  1880  and  1890  are  not  included  in  the  table 
below. 


APPENDIX  V. 


589 


lUg. 

n-ane 
WO. 

ofDorrMiM 
In  1H80. 

(.20 

70.06 

KM) 

•     • 

l.()l> 

. 

.78 

.     .     . 

(.30 

.     .     . 

Kind*  or  Stkil. 
(Ingots  ur  direct  cutiiigi.) 


Ui'tseinur  steel     .    .    . 
Opcnliearth  atcel     . 
Crucible  steel .    .    . 
Clnpp-Uritflths  steel 
Kobcrt-Besicmer  steel . 


Total 


TOMI  Uf  2,000  PoUNDi. 


Year  enilml 
May  81, 1800. 


986,208 
8-1,302 
76,201 


1,145,711 


Ywir  rnili-il 
JuneaO,  I8U0. 


3,788,672 

504,361 

86,580 

83,063 

4,504 


4,466,020 


During  1880  fourteen  States  contained  steol-niaking  establish- 
ments, and  steel  was  produced  in  that  year  in  each  of  these  States 
except  Rhode  Island  and  Maryland.  In  1890  steel  works  were 
located  in  nineteen  States,  and  steel  was  made  in  that  year  in  each 
of  these  States  except  Kentucky,  Missouri,  and  Virginia. 

Pennsylvania  continues  to  occupy  the  position  of  the  leading 
producer  of  steel  in  the  United  States,  producing  57  per  cent  of 
the  total  production  in  1880,  and  G2  ])er  cent  ax  1890.  Illinoia 
wiis  second  in  rank  in  both  years,  and  Ohio  was  third.  From  1880 
to  1890  the  increase  in  production  in  Pennsylvania  was  324  per 
cent,  in  Illinois  241  per  cent,  and  in  Ohio  314  per  cent.  Since 
1880  the  manufacture  of  steel  has  been  aban(h>ned  in  two  States, 
namely,  Rhode  Island  and  Vermont,  and  seven  States  have  engaged 
in  its  production,  namely,  Alabama,California,  Colorado,  Indiana, 
Michigan,  Virginia,  and  West  Virginia.   .   .   . 

The  remarkable  growth  that  has  taken  place  in  the  Bessemer 
steel  industry  of  this  country  during  the  past  ten  years  is  well 
shown  by  the  above  ligures.  The  increase  in  the  number  of  estab- 
lishments producing  Hessemer  steel  has  been  the  result  almost  en- 
tirely of  the  demand  for  steel  in  forms  other  than  rails.  All  of 
the  eleven  Bessemer  steel  plants  that  were  completed  in  1880  had 
been  built  to  manufacture  steel  for  rails,  many  of  them  being  added 
to  previously  existing  iron  rail  mills.  Of  the  fifty-three  Bessemer 
steel  plants  at  the  close  of  1890  only  fourteen  made  steel  rails  dur- 
ing that  year,  and  of  the  total  quantity  of  rails  produced  over  90 
per  cent  was  made  by  ten  of  these  works.     Thus,  while  the  pro- 


II: 


wo 


ECONOMIC  HISTORY'. 


M 
m 


m.i 


<lii('ti<)ii  of  Htt'i'l  rail«  Iiiih  nciirly  trcMt'd  in  uinouiit  since  1880,  the 
nunilx'r  of  t'stuMiHlinicntH  fn^Mgcd  in  tlwir  niuinifiu-tur*'  hiiH  hIiowh 
l)Ut  little  cliiiii^'f  in  tlic  ten  ^-cuih,  iiitliuiigh  iniiny  of  tlu>H*>  workH 
liiivf  jjriiitiy  intn'ii.st'il  in  size  tin<l  ftlicii'iify.  Tiw  coiniK-tition  in 
till-  niunnfiu'turo  of  ItcsHcnicr  Htccl  rails  IniH  coni|K'llf(l  iniiiiy  of  tlu> 
mil  mills  to  convert  ii  lar},'i'  part  of  tlio  «t»'or|iro(lnc<Ml  liy  tlicni  into 
furniH  utlier  thun  rails,  thu  ]iro(hictiun  uf  rails  to  any  consiilerabU- 
extent  at  the  present  time  being  possible  only  in  works  favorably 
located  for  thu  supply  of  cheap  raw  materials  and  operated  nnder 
the  latest  and  most  improved  methods  of  nnmufacture.  Incinded 
in  the  total  production  of  Hessemer  steel  rails  during  IH'.H)  were 
(m,!.'?.'!  tons  rolled  in  iron  rolling  mills  frum  purchased  itessemur 
stetd  blooms. 

Whilt!  the  demand  for  steel  rails  has  shown  a  remarkable  growth 
Bince  1880,  thereby  forcing  a  practical  discontinuance  of  the  manu- 
facture of  iron  rails,  there  has  also  been  a  rapidly  injTcasing  use  of 
steid  for  nails,  bars,  rods,  wire,  and  other  miscidlaneous  forms. 
The  growth  of  the  I^essemer  steel  industry  in  this  direction  is 
clearly  shown  in  the  number  of  plants  that  have  been  added  to 
iron  rolling  mills  during  the  past  ten  years  for  the  purpose  of 
manufacturing  steel  in  forms  other  than  rails.  The  increased 
i|uantity  of  Bessemer  steel  mainifactured  in  these  miscellaneous 
f(Tms  is  ajiproximately  shown  by  a  coniparisim  of  tlu'  ingots  and 
rails  produced,  over  7o  per  cent  of  the  ingots  made  in  IH.SO  being 
converted  into  rails,  while  in  1890  the  percentage  of  rails  made  to 
ingots  |)r(Mluced  was  only  5l^  per  «;ent. 

The  production  of  open-hearth  steel  in  the  form  of  ingots  or  di- 
rect castings  during  181)0  amounted  to  504,;ir>l  tons  of  2,000 
jKMinds,  as  (compared  with  81, .'{((li  tons  nuide  during  1880.  In  1880 
there  were  lio  establishments  containing  open-hearth  steel  plants, 
located  in  ten  State.i,  and  in  185)0  there  were  58  establishments 
containing  open-hearth  sti'el  plants,  located  in  twelve  States. 
Since  1880  the  manufacture  of  open-hearth  steel  has  been  aban- 
doned in  two  States,  Vermont  an<l  Rhode  Island,  and  four  States 
have  engaged  in  its  manufacture,  New  York,  Alabama,  Indiana, 
and  California.  During  the  past  fv'W  years  great  activity  has  taken 
place  in  the  erection  of  open-hearth  steel  plants,  and  indications 
point  to  a  still  larger  production  of  this  kind  of  steel  during  the 
next  f«'w  years. 

The  crucible  steel  industry  has  shown  but  little  progress  since 
1880,   the  production  in  that  year  amounting  to  76,201  tons  of 


I      !i 


APPENDIX    v. 


Ml 


L'jOiK)  (xnitulfl,  na  comjJnnMl  with  8/>,j"»."Ui  tonw  produced  in  1890. 
Ill  1880  tlitTc  were  i'{(>  t'stiihlisIinii'iitH  contiiiiiiiif;  cnuriblo  Hti-ol 
plnntH,  lociiti'd  in  niiit*  StatcH,  wliilu  in  1890  thu  lunnbor  of  etituh- 
liHhnit'iitu  IiikI  increased  to  47,  located  in  eleven  States.  Fur  pur- 
poses reipiiriMg  special  j^iiides  of  steel  the  ppidiict  of  the  crucildo 
process  will  he  always  in  demand,  hut  the  hi^h  cost  of  nianufacturu 
prevents  it  in  many  instances  from  successfully  competing  in  prico 
with  the  other  processes  mentioned. 

The  lirst  hasi«!  ste(d  made  in  the  United  States  was  i)roduced  ex- 
jieriniiMitally  at  Steelton,  lVnn.sylvania,  l>y  the  Pennsylvania  Ste«d 
Co.  on  iMay  24,  1884,  in  a  IJessemer  converter.  The  he^inniiig  of 
tin*  manufai^ture  of  hasi(!  steel  in  this  country  as  a  commercial 
product,  however,  dates  from  1888,  on  the  L'8th  of  ^larcli  of  which 
year  the  first  basic  open-hearth  steel  was  produced  at  the  Home- 
stead Steel  Works  of  Carnegie,  rhi|ips,  &  Company,  Limited,  at 
Ifomestcad,  near  Pittsburgh,  Pennsylvania.  Since  that  date  the 
manufacture  of  basic  open-hearth  steel  has  been  continued  at  these 
works,  and  during  1890  this  firm  commenced  the  erection  of  eight 
additional  open-hearth  furnaces  for  the  manufacture  of  basic  steel, 
of  whi(di  number  four  are  now  in  operation,  and  the  remaining  four 
furnaces  are  expected  to  be  rea<ly  for  working  in  a  short  time. 
When  completed  thes(>  works  will  contain  IG  open-hearth  furnaces 
prepared  to  manufacture  basic  steel.  The  manufacture  of  basic  steel 
is  now  also  regularly  carried  on  at  the  Steelton  works  of  the  Penn- 
sylvania  Steel  Company,  where  a  combination  of  the  ISessemerand 
open-hearth  processes  is  used.  During  1890  the  Henderson  Steel 
and  Manufacturing  Company,  at  Birmingham,  Alabama,  jiroduced 
steel  experimentally  by  the  basic  process.  Since  the  close  of  the 
year  the  Southern  Iron  Company  has  successfully  commenced  the 
manufacture  of  basic  open-hearth  steel  at  its  works  at  Chattanooga, 
Tennessee,  The  Pottstown  Iron  Company,  at  Pottstown,  Pennsyl- 
vania, has  also  pniduced  steel  by  the  basic  process. 

Ill  Cireat  Hritaiu  and  on  the  Continent  the  liasic  process  has  been 
received  with  great  favor,  and  large  (piantities  of  basic  steel  are 
made  annually  by  all  the  leading  iron  and  steel  jtroducing  countries 
abroad.  The  wonderful  growth  of  the  steel  industry  of  Germany 
and  Luxemburg  during  recent  years  has  followed  the  introduction 
of  this  process,  the  ir(>a  ores  of  these  countries  being  especially 
suited  to  the  manufacture  of  basic  stetd. 

While  the  basic  process  is  api)licable  to  either  the  Bessemer  or 
open-hearth  process,  its  use  in  this  country  in  connection  with  the 


542 


ECONOMIC  HISTORY. 


open-liearth  furnace  \»  mo»^  promising  of  successful  results,  and 
the  in  'ciitions  are  tlmt  tiio  growth  of  the  basic  steel  industry  of 
the  United  States  will  be  largely  in  this  direction.  The  total  pro- 
duction of  basic  steel  in  the  United  States  <luring  1890  amounted 
toO-,17y  tons  of  2,000  pounds,  nearly  all  of  which  was  made  by 
the  basic  open-hearth  method,  a  small  part  being  produced  by  the 
dupli!x  process,  a  combination  of  the  Jiessemer  and  open-hearth 
methods. 


MUNICIPAL  RECEIPTS   AND   EXPENDITURES. 


ItouKKT  r.  Porter. 


It'f™',  .  .: '1 


[Eleventh  Census  nullotin,  No.  ^'>  ] 

TiiK  statistics  of  this  bulletin  showing  in  detail  the  receipts  and 
expendituri's  for  one  year  of  oin'  hundred  |>iini'ipal  or  representative 
cities  in  the  United  States,  aggr.gating  a  population  of  12, 4-;"),  .*{(}(!, 
or  al)out  two  tliirds  of  tlie  urban  population  of  the  United  States, 
have  been  prepared  I>y  Mr.  J.  K.  Upton.  The  following  table 
shows  the  total  receipts  and  expenditures  as  elassilied  by  the 
detailed  statement:  — 


RKCKII'TS. 

TnxM J130^,226 

SperinI  iu>i<cii<in6nti>,  utrppUi  anil 

briilip'* 

Special  MW'Mnenf",  wwpni    ,     . 


Uoctifo,  I  ''''"""• 

t  OtiHT 

TiH-n,  fltip'i,  nnd  |i«nitltlva  . 

WHt«'r«iirk« 

lnti'rr«t  nn  (le|in«lt,« 

Inrniiio  frDiii  funds  anil  InTfiit- 

niCMtK 

MiiTi'llitneoui 


13,*i«,n36 
1,3*1,1157 

.tlllATO 
2,714, 4tH 

18,t>2«,3Blt 
676,0.17 

in,W2.i'tl 

12,HH0,()33 


Totnl  onllnary  rwplpU  .    ,  Kin,^!..!^ 

I.o«n« 8»,.'1.".2,IW.S 

Fiinl«nniltriin.fiT!i      ,     .     .     .  1H,:!S|,'17.1 

From  Sintf  or  connly    ,     .     .     .  r.,ll.1,!t47 
llnUiirc,  oiuli  on  h«nil   lii'nln- 

nli'K  <>r  jcnr 


-# 


a'i,H44,nM 

Gnnd  total «a68,024,8tr:   I 


KXPEND1TUKK9. 


Librarirt 

Sl'llMlU 

Kim 

Ilmlth 

l.lKliliiig 

I'l.lic.' 

'.'Iiiirltalilo  obJwU 

Strt'vU  nnd  briili^a 

Si'ttcri" 

lliilMiiiir«  and  ImiiroYrinpntu 
l*ark«  and  publlr  itroundj      ,     . 

Siilnrli'd 

W'litorwnrka 

Iiitcn-Kt  nn  debt 

MiiTt'llnm-oiii  .  .... 

Ti'fnl  onllnnrv  PxponfM  .     . 

I.onnii 

KnndH  and  »ran»fi'--      .     ,     ,     . 

Dnlnnrc,  rn»li  iir  band  at  end  of 

>far 


»RlS,2n2 
2i'sllPt<,i:.3 
11,8(16,402 

2,280,317 

7,747,818 
17,817,436 

7,liVl.U01 

3a,:.H(),ai9 

f>,(M3,510 
0.7ir,,070 
12  (172,494 
ll,8;»,4ri8 
111,08(1,761 
a2,2ri0,.'M8 
»l,8(ll,ik43 

i2.'M,fi2lVn66 

Mi,4KH,nii 

28,;i30,,S86 
311,670, 1!« 


GraodtoUl t36U,lKM,3-.i3 


t4.»i.i,:'-- 


APPENDIX  V. 


543 


esults,  and 
industry  of 
e  totiil  pro- 
i)  ani( united 
,s  niiulu  l)y 
iced  by  tlio 
)Iic'n-hoartli 


JitES. 


■cccipts  and 
jrcsfiitativc 

rj,42r),;{(JG, 

itod  StatPH, 
wing  talilc 
^iod  by    the 


KS. 


of 


2il,llit<,173 

ll,8«n,402 
2.2H<l,317 
7.747,318 

17,N17,430 
7,lti'l,B0l 

33,W0,a(« 

r>,!>i3,riio 

9.71A.ii7() 

\'i  ii72,4m 
ii,K;«,4r* 
i'.i.m«i,7r)l 

83,'2«l,868 
84,H«l,ii4U 

C2S4.n9R.flB6 

Mi.4>'N,llll 
2S,3»U,385 

80^70.108 


Comparing  detailed  aniounta  expeudt'J  by  cities  with  those  ex- 
pended by  States,  the  magnitude  of  municipal  expenditures  is 
clearly  exhibited. 

Omitting  amounts  on  account  of  loans,  transfers,  and  funds,  the 
ordinary  expoiiditures  of  the  State  of  Miissachu.setts  for  the  year 
ending  Dec.  31,  188i),  as  compiled  by  this  office,  was  $4,955,009. 
With  like  omissions,  the  expenditures  for  the  city  of  lioston  for 
the  year  named  amounted  to  $16, 117,04.'J.  Like  ordinary  expendi- 
tures of  the  States  of  New  York,  Massachusetts,  Pennsylvania, 
Ohio,  l^lissouri,  and  Illinois,  the  six  largest  States  in  the  Union  in 
population,  for  one  year  uiuounted  in  the  aggregate  to  $28,859,010, 
while  in  the  same  jteriod  the  ordinary  expenditures  of  New  York 
City  alone  amounted  to  848,9.'i7,094.  The  State  of  New  York  ex- 
pended in  1889,  for  legislative,  executive,  and  judicial  purposes 
$1,019,127,  an  amount  cinsiderably  exeeeding  like  expenditures  in 
any  other  State;  but  tiie  amount  for  the  same  period  paid  for  sal- 
aries alone  for  such  jturposes  in  certain  cities  was  as  follows:  New 
York,  «a, 488,834;  Brooklyn,  S2,.'JL'5,084;  riiiladelphia.  81,l.'U,;i7f>. 

NATIONAL,    STATK,    AND  COUNTY  INDEBTEDNESS. 

RonKKT   p.    PORTEB. 

[Eleventh  Census  Bulletin,  Xo.  64.] 

TiiK  total  and  per  capita  indebtedness  of  seventy-nine  foreign 

nations,  the  United  Stati-s,  the  several  State><,  and  tlidr  res] tive 

counties,  given  in  the  present  bulletin,  was  prepared  by  Mr.  .J.  K. 
Upton.  Tlie  indebtedness  of  tlie  world  for  1890  and  1880.  us  far 
as  it  has  been  possible  to  ccdlect  the  data  for  this  bulletin,  with 
the  amount  of  increase  or  decrease,  is  as  follows:  — 


DiTIUONI. 


Debt  Lks  SiNKwa  Fund. 


1880. 


Total . 


I  $2n.'.tl7,0!t«,tWil 


IfWO. 


Incrram. 


$3fi,HIH,621,21U  tl,0!W,r>7r>.461 


Foreign  nation*  .     Wri,rK'W,O7r,,S40  f2.1,4Sl,B72.I8fi  #2,lM,Sl3,88fi 


ff35U,ii24,3'.''i 


TlielJnltcil.'«tiit«"< 


8UIM  and  t«ni- 
turlri      .     .     . 


Conntira    .    . 


Iil5,962,112       1,922.617,3<H 

223.107,<«;i'        a!iO,.«6,643 
141,'.>60,H45         124,li>-.,(rr 


17,M5,S18 


DwfMUIO. 


Dm? 
PER  CAriTA. 


91,0n(),«l,'-,.262    14.63 


67,218.760 


1890. 

1880. 

63  82 

80.73 

33.16 

34.14 

14  63 

88  a3 

3S6 

r.79 

2  27 

3.47 

i'!! 


h 


544 


ECONOMIC  HISTORY. 


From  the  summary  published  it  will  be  seen  that  ulatively  the 
burden  of  debt  falls  far  heavier  upon  the  inhabitants  of  the  prin- 
cipal foreign  countries,  except  those  of  Germany,  than  upon  those 
of  this  country.  France  in  1889  had  a  debt  per  capita  of  $110.35, 
and  it  is  understood  that  this  does  not  include  certain  annuities  of 
an  unstated  but  large  amount;  Great  Britain,  though  slowl}'  de- 
creaHing  it.s  debt,  hrfd  a  burden  at  that  time  of  $87.79  per  capita; 
Russia,  $30.79;  Austria-Hungary,  670.84;  Italy,  870.00;  Belgium, 
603.10;  The  Netherland.«,  695.50,  while  that  of  the  United  States 
was  but  614.03,  and  of  its  indebtedness  nearly  one  half  was  made 
up  of  non-interest-bearing  notes. 

Wliilo  individual  fluctuations  in  the  amounts  of  indebtedness  of 
the  seventy-nine  foreign  nations  reported  have  been  considerable 
during  the  decade,  the  aggregated  indebtedness  shows  relatively 
but  little  change,  especially  if  comi)ure(l  with  the  increase  of 
population. 

The  j>ublio  debt  of  the  United  States  shows  a  gratif^'ing  decrease 
within  the  last  ten  years,  the  burden  per  capita  having  been  re- 
duced from  638.33  in  1880  to  614.03  in  1890. 

The  indebtedne-s  of  the  States  and  Territories  has  also  decreased 
607,218,700  during  the  decade,  reducing  tlie  per  capita  from  65.79 
in  1880  to  63.50  in  1890.  It  should  be  remembered,  however,  that 
of  the  total  decrt  '  f  State  (lel)t  as  reported  tliere  has  been  scaled 
by  refunding  in  some  of  the  Southern  States  alunit  6-8,500,000. 

The  indebtedness  of  the  counties,  though  increasing  somewhat 
within  the  decade,  has  not  kept  pace  with  the  increase  of  popula- 
tion, and  the  per  capita  has  been  reduced  from  62.47  in  1880,  to 


Aggregating  the  national.  State,  and  count  ,•  indebtedness,  the 
per  capita  shows  a  decrease  from  640.59  in  1880  to  620.40  in  1890, 
or  more  tlian  one  half,  and  this  decrease  has  been  brougb.t  about 
mainly  by  voluntary  taxation.  The  aggregate  surplus  receipts  of 
another  decaile  like  tlie  one  just  past  would  relieve  the  country 
from  nearly  all  national,  State,  and  county  indebtedness  could  they 
be  distributed  for  the  purpose. 


A  SELECT    BIBLIOGRAPHY    OF 
ECONOMIC    II18TOKY. 


P 
illi 


increase   of 


Acwortb,  W.  M.     Tlie  Railways  of  Eiijjlaml,  2(1  ed.     London,  1890. 

Tin;  Uailways  and  llie  Traders.     A  Skftch  of  tlie  llailway   Rates 

Question  in  Tln'niy  and  I'raotici'.     London,  18!)1. 

Adams,  Jr.,  Charles  Francis.  Railroads:  tladr  Origin  and  Problems. 
New  York,  \S7S. 

Railroads  and  I'ailroad  (^nestions.     Xew  York,  1878. 

Adams,  Henry  C.  Taxation  in  the  United  States  17b!)--1818.  Jolm.s 
Hopkins  University  rnblications,  Raltiiiiore,  1884.  2d  ed.,  Ann 
Arbor,   1888. 

rnblic  Debts.     2d  ed.     Xew  York,  18.00. 

Allard,   Alph.     La   Crise,  la  baisse  ties  \'v\x,   la,  nionnaie.     Paris  et 

r.iiixelles,  18S.-.. 
Anic,  Leon.    Kliide  snr  le.^  Tarifs  de  Donanes,  et  .sur  les  Traites  do  Com- 

niiMcc.     2  toin.      I'aiis,  187') 
American  Economic  Asaociation,  Publications  of.     Vols,  i.-vi.     15al 

tinicire.  iSSi-Dl. 
Annual  Pubticationg.i 

Annuaire  ile  1  I'^conomie  Politique.    48"  Annee.     Paries,  1801. 

Annnaiie  ;.tatisticiue  de  la  lielgiciue.     XXI.  Annee,  18:)i).     Rrnxelles, 
Lsill. 

Constitutional  Year-Book.     Vol.  vii.     London,  1801. 

.'statesman's  Veai-I!(»ik.     Vol.  xxviii.     Lnnd.  and  X.  Y..  1801. 

Statistical  Year-I.ook  ot  .'anada.     (Jtli  year,  1800.     Ottawa.  1801. 

Stati.^tisclics  J.iln'oucli  fur  das  Dent-sclu'S  Reich,  ell'tor  .lahr.     Berlin, 
18!)i». 

Wliitaker's  .\hnanac.     London,  1801. 
Arendr,  O     l)i"  vertrag.srniisiire  Doiipel-Wiilirnnj*.    2  Th.     Rerlin.  1880. 
Aschrott,   P    r.      The    Kni^lisli   Poor-Law   System,   I'a-t  and    Present. 

Trans,    by    IL     Prrston     i'honias,    with    preface    by    M.    Sedgwick. 

Lontb:.,  1888. 
Ashley,    W.   J.     An    Introduction    to    English    Economic    History  and 

Theory.     The  Middle  Ages  [P„„,k  I.].'^  Lond.  &  X.  Y.,  1888.  ' 

1  Only  the  current  volume  U  mentioned. 
86 


'      I 


546 


ECONOMIC  IIlSTOliV 


Atkinson,  Edward.     I'lic  Distribution  of  Products.     New  York,  1885. 
Till!  MiiiL'iii  of  I'lotits.     New  York.  1887. 


w. 


Tiie  Iiidiisliliil  i'nijrnss  of  the  Xiilion.     New  York,  1890. 

Atti  della  Commiaaione  d'  lucbieata  suil'  Kserciziu  deilu  I'eiTuviu  Ituli- 

uno.     7  vols.     1881. 
Baboau,  Albert.     Lu  Village  .sous  riiMci(n  regime.     ;i«  ed.  rev.  et  aug. 

I'liris,  1.S8-'. 

Lii  \u'  ruralo  dims  i'luuicinie  Franco.     Paris,  188.1. 

Baeriii either,  J.  M.     Knglisii  AsHocintiuii.s  of  WOiking  Men.     London, 

]8s:). 
Bagebot,  ^Valter.     Lonihard  .Street.     Otli  cd.     London,  1875. 

l)e|HtM  iiiti(»n  of  Silver.      London,  i.'^77. 

Balnea,  Edward.     History  of  tUe  Cotton  Manufacture  in  (ireat  Britain. 

Liindnn,  18).'). 
Bamberger,  L.     Die  Sciiicksal  des  lateinisdien    Miin/.l)undcs.     Berlin, 

188,"). 
Baudrillart.  Henri.     Ilistoire  du  Luxe.     1  toni.     Paris,  1881. 

Les   P()jiidati(Uis  Hj,'rieolos  ile  la   l-'rance.      ['_'  toni.]     Paris,  18S.') 

et  SS. 

Baxter,  R.  Dudley.     National  Debts.     2d  ml.     London,  1871. 

Beer,  Ad      Ailgemeine  Gescliiclite  des  >Vultliandels.    •'{  Abtlt.  in  i  liden 

Wirn,  18110  81. 
Besobiasof,  W.     Ltudes  sur  I'lvonoinie  nationale  do  Jt.  Ilussio.     St. 

I'l'i'rslHiin'u:,  l^xii. 
Bigelow,  E.  B      'I'lie  Tariff  (.^ncstinn.      P.pston,  Isd'J. 
Birbeck,  W.  Lloyd.     Ilistorual  Skeicli  of  tin;  Distribution  of  Lanil  in 

LuKland.     Lun.l.  \  N.  V.,  Ls8.V 
Bishop,  J.  Leander.     History  of  American  Manufacture  from  1008  to 

l.>i(iO.     'J  vols.      Pliiladeiphia,  1801    ISOL 
Block.  Maurice.     Dictionnaire  I'^eni'ral  de  la  Politique,     'i'"  e<l.     'J  torn. 

Paris,  lsi;7. 

Statisti'iue  de  la  I'rance,  comparee  avec  les  divers  Pays  de  I'Euroix'. 

'2'  ('d.     L'  toni.      Pari-.,  1.S7."). 

Boiteau,  Paul,     l^tal  de  la  I'r.cu'ppn  17^0.     Pari-,  l.siil. 

Bolles,  Albert  S.      Finanrial  lli.-lcry  of  llie  I'liiled  .Suites  from  1771   to 

Iss."..     ;i  vols.     New  York,  I.s7!)-i880. 
Bourne,  E  O,   The  History  of  tiie  Surplus  llovenue  of  18;J7.    '"-'ewYork, 

1  ss:.. 
Bousquet,  O.    Lo  Jiipon  de  nos  jotn-s  et  les  fieliolles  di-  I'lixtremn  Orient. 

Paris,  1.S77. 
Bowker,  R.  R.,  and   lies,  George  (editors).     The  Keailer's  fJnide  on 

Keonomic,   Social,   and   Political    Science,    being  a  classilied   Ilibli- 

oirrniiliy.      New  York.  lS!tl. 
BrachfiUi.  H.  P.     Di- Stiaten  F.uropa's.     4  Anfl.     Priinn,  ISHl. 
Branspy.  Thomas.     Foreiirn  Work  aiicl  l",nirli>h  Wau'es.      London.  1870. 
Bristetl,  Jol'.n.      l!>'-onvres  of  Mie  ('iiite(l  Slates.      New  York.  1S18 
Burckhnrdt-Bischoff,   Ad.     Die  lateinisidie   Miinz-Convention  und  der 

iuternationalu  llimutallismus.     iliusel,  18SG, 


BIBLIOGRAPHY. 


Mfl 


:ork,  1885. 

>9(). 
BiTovic  Itali- 

rev.  ct  aug. 

n.     London, 

5. 

reat  Urilaiii. 

lies.     Berlin, 

II. 

I'iiris,  186') 

71. 

Ii.  in  I  n.li'ii 

Un.ssie.     St. 

1  of  Land  ill 

rom  1008  to 

(■d.     2  toin. 

ide  rKiiroi>i', 

fiom  1771  to 

,    's'owYork, 

it^ine  Orient. 

r'8  Gnido  on 
.ssilied   llibli- 

18H1. 

iiiiilon.  1S7!). 
k.  1S18 
lion  und  dtr 


Burnley,  J     The  lli.story  of  Wool  and  Wool-Combing.     London,  1887. 
Buxton,  S.     Finance  und  Politics.     An  Iliatoricul  Study,  17b^-18b5.     2 

vol.s.     i.iondon,  1888. 
Caird,   Sir  James.     The   Landed    Interest   and   the    Su{i(>ly   of    Food. 

London,  1^78. 

India,  'I'lit'  Land  and  the  IVojiU!.     London,  1883. 

Cairnes,  J.  E.     Slave  I'ower.     I.,ondoii,  l.stJ2. 

Ks.siijs  in  i'olitii!id  Kcononiy.     l.,oiidon,  1873. 

Census.     Sec  (ioveniinent  I'nliiiciitioii.s. 

Chevalier,  Michel.     IliHtoiru  ct  De.scription  des  Voies  de  Communica- 
tion.    •_'  toni.     Paris,  1«I0-11. 

On  the  Probable  Fail  in  tiie  Value  of  (lold.     [Trans,  by  Kiohard 

CoIkIi'ii.J     !.,(>ndon,  l.S.'i!). 

Chisholtn,  Oeorge.    ilanili'ook  of  Commercial  (Jcoi,'ra]ihy.    London,  188!l. 
Clarke,  M.  St.  C,  and  Hall,  D.  H.     Le<,Mslativ<;  und  ilocumentaiy  lli.story 

of  the  Kaiik  of  liie  United  Slat.'s.     Washiiinton.  Ks:iJ. 
Cobden  Club  Essays.     Systems  of  Land  Tenure  in  various  Countries. 

London,  l.S7(». 

Second  .Series.     l.,ond.,  Paris,  \e\v  York,  1S7'J. 

Local  (iovernment  and    Taxation.     Lond.,  Paris,  and  Now  York, 

187.->. 

Cohn,  Oustav.     rntersueliimtjcu  ulicr  die  Kn^li.sclie  Eisenlmlinpolitik. 

;J  I'.de.     L-ipzii,',  1«7I,  187;"),  IsWl. 
Consular  Reports.     See  (lovemnicnt  Publications. 
Cook,  William  "W.     "  Trusts."     I'd  d.     New  York,  1SS8. 
Courtois,  Alphonae.     Ilisloiro  des  namiucs  en   Franco.     "Jc  cd.      P.aris, 

Issl. 

Coxe,  Tench.     A  View  of  the  I'nited  .States.     A  series  of  jia]iors  written 
at  various  times  between  1787  and  17!tt.      Phil.,  17!M. 

I'liited  Stales  .\rts  and  .Manufa(;liiies,  islo.      I'liil..  1ft]  1. 

Cuiii7ingham,  W.     (irowlh  of  Kn;;lisli   Industry  and  Commerco  during 

the  Karly  and  Middle  Atjes.     I'd  ed  enl.     I^ond.  &  N.  Y.,  1800. 
Del  Mar,  A.     .Money  and  Civilization:  or  a  llisturyof  the  Monel  uy  Laws 

aii>l  .Systems  of  Viirious  Stales  since  the   Dark  .Ai^es,  and  their   liillii- 

eiioe  on   ('ivili/.iitioii.      I.oinioii,  IHHIJ. 
Donaldson,  Thoma-J      The  Public  Domain      Wash   Gov.  Pr.  Of..  1,S8|. 
Dorsey,  E.  B.     IhiLflish  and  ,\ineiican  Uiilroads  compared.     'Jd  cd.     New 

York.  '^^^7. 
Dowell,  Stephen.     .\   History  of  '1  .-ration  and  Taxes  in  Fns;land.     4 

vols.     London,  1H81. 
Dunbar,  Charles  F.     Chajiters  on  the  Theory  and  llistorv  of  Hankimr. 

New  York.  1S!)1. 

Laws  of  the   I'niteil  States    relating   to   Ciirrnn  -y,    Fin.'ince,   niwl 

liaiikiiii,'  from   ;7Hfl  to  ',S!ll.  with  vetoed  Mills.      Ilostoii.   1S!)1. 

Eden.  Sir  Frederic  M      The  State  of  the  Poor;  or   A    History  of  La- 

bouiiiii,'  Classes  ill  l'',ni;hind.     ;i  vols.      Lond..  1707. 
Elliot:,  A.  O.  F      Indian  Industries.      London,  L^-ii. 
Ellison,  T.     Cotton  Trade  of  Great  Britain.     London.  18H0. 


548 


ECONOMIC  HISTORY. 


Ely,  Richard  T.    Tho  Labor  Movement  in  Ajnerica.     Now  York,  1880. 

und  Finley,  J.  H.     Taxutiun  in  Aniuriciiu  States  and  Cities.     New 

Yorit,  1«88. 

BmminghauB,  A.     Poor  Relief  in  Different  Parts  of  Europe.     [Trans. 

from  <i<Ttn:in].     London,  187^1. 
Eras,  W.     Der  \Viihrunf;.streit  1«7!»-188:J.     Herlin,  188:1. 
Farrer,  T.  H.     Tin;  .St;ilo  in  its  Kelalion  to  'I'ratle.     London  and  N.  Y., 

188.;. 

Faure,  F.     Les   IWidgcts  (Idiitoniporains:    nudfjct.s  do  la  Franco  ilepni.s 

Vini^t  An.s,  et  do8  I'rinciiiaux  Elats  dc  rKurojio  doimis  1870.     Paris, 

18m7. 
Faixrcett,   Henry.     Kcononiic  Po.sition  of  th"  English  Laborer.     Lond. 

and  X.  Y.,  18(J.'). 

l'iiii|ic'rism:  its  Causos  and  Hcnuxlios.     Lond.  and  X.  Y.,  1871. 

Fink,  Albert.     Tin;   Kaili'oad  Problem    and    it.t  Solution.     New  York, 

Ih^J. 
Foville,   Alfred   de.     La   Transformation   des    Moycn.s  de   Trans^jort. 

Palis,  l8,>-0. 
La  Kraiu't!  Iv'ononiiiiuo.      P;nis,  1S87. 
Foxwell.  B.     .\  Histoi  V  of  Kntjlisli  HaiKvay.''.     London,  1880. 
Oallatin,  A.     Vit-w.s  of  tlic  Public  Debt,  UtLeipts  and  E.\-|ienditnres  of 

till'  Tnilccl  .S(at<'8.     2d  i-d.      Piiil.,  I8(ll. 
Considcr.ilions  on  the  Currency  and  IJankii'fj  System  of  tho  L'nitod 

Slates.      Pill!.,  I8:il. 
Oibbins,  H.  de  B.     .An   InduHtrial  History  of  Enp;land,     [Tho  fnst  of  a 

series  of  handbooks  on  historical,  literary,  and  economic  tupics,  di'- 

sijjncd  ("or  nniv<'rsity  extension  students  and  tor  home  leadeis.J     Lcm- 

doii.  isiil. 
Oiffen,  R.      Kss.-ivs  in  Finance.     liondon,  1^8(t.     'Jd  series,  1886. 

The  (;i(n\lh  i.f  t'lipilal.      London,  1.81)1). 

Oilbart,  J.  W.     The  llistiry,  Princijiles,  and  Practice  of  IJaiikinj,'.     '_' 

\(ils.      Lniiddn.   i~«8J. 
Oilman,  N.  P.     Piolit-siiarii..:  between    Lm[ili)yor  and  Emiiloye.      itos- 

ton,  ls.>'). 
Goode.  O.  Bro'wn  (and  asHOciates).     The   Fisheries  and  (he   Fishery 

liHlii>ti'i  s  nf   the  rmled  Sl:iti  s.      V.   Seclidiis.      Wiish.,   18^|    87. 
OoBchen,   Opor^'e.      Ile|hiiis    and    S{ieeehe.s  on  Local  Taxation.      I.ond. 

ah<l  New  Vdik.  1^7-'. 

Theory  and  Practi.e  of  the  Foreign  Exchanges.     London,  188'!. 

Oo«uy  du   Roslan,  J.     Ks>ai  sin-  ITIisti'iie   Economiiiue  dc  I'E  ^M^^ne. 

Pari-,  iss-,. 

Government  Publio^itions.  Various  jjovernments  i.ssue  valuable  statis- 
tical   :i.iid    hoiiiic  |iidilii>aiions  thion^rh  their  several  d)'|iai'linents, 

whieli  iiiiiy  lie  (iblaine  I  upon  npplicalioii. 

Orah>im.  "iVilliam.  Tlic  .Siiei;il  Prolilern  in  its  Ecotmmical.  Moral,  and 
I'lijiticil  .\spects.      Loudon.  1>M>. 

Grandeau.  L.     I. a  j>ro<luction  ajjiicolecn  France.     P.iris,  1SS.*». 

Gtierson,  J.     Railway  Rates.  —  English  and  Forei^'n.     Lotid<ii.  l^^O. 


BIDUOGRAPIIY. 


540 


rer.     Lond. 


Gross,  C.     The  Gild  Merchant.    2  vols.     Oxford,  1890. 

Orosvenor,  W.  M.     Dot-s  I'rotectioii  Proti'cl  ■'     N.  Y.,  1871. 

Ouyot,  Yves.      L'Orgaui:iutiuii    iiiuiucipiilt!  du  I'aris  et  de  Londres. 

I'aris.  1^8:1. 
L'Imiiot.  sur  le  Uevenii.     I'aris,  1887. 

I, a  Nii|i|>i(.'.s.si(jii  <ic8  Octrois.     I'aris,  1889. 

Haborer,  Theodor.     (icschiililo  des  Kisunbaiiiiwesens.     Wieii,  1884. 
Hadley,  Arthur  T.     Uailroad   Traii.si>urtaliou,  its   History  and   Laws. 

New  York,  1S8S. 
Hamiitoii,   Alexander.      lt«>|>ort  on    Manufactures,   1701;    Reports   on 

riii)lic  ("ri'dit,  17!M)-1"!).'»;  U.-port  on    National   IJank,  1790;    in   his 

Wiirks  (Lo(l};<i's  ed.).      New  York,  Iss,"). 
Hansoer,  E.     Die   Kntwickelung  der  Viuhzucht  in  Preussen  von  1816- 

1S«:$.     Jena,  1887. 
Haupt,  O.     Arliitrages  et  parites.     O'"""  dd.     Paris,  18H;J. 

Walirunijspolitik  und  Miiii/,  .Statistik.     Berlin,  lh8l. 

I'hi.stoire  niouiHaire  de  iiotre  temps.     Paris  et  Berlin,  1880. 

Held,  Adolf.  Zwei  Hiicher  zur  socialen  (icschichte  Kiiglands.  Leipzig, 
18H1. 

Hertzka,  Theodor.     Wiilirung  und  Handel.     Wien,  1870. 

Herzog,  T.  B.     The  Tranai)ortali()n  (iue.stion.     New  York,  1883. 

Hewitt,  Abram  S.  Statistics  and  Geography  of  the  Production  of  Iron. 
New  Yoik,  18.J0. 

— —  A  Century  of  Mining  and  Metallurgy  in  the  United  States.  Phil.. 
1S70. 

Heyd,  W.  Ilistoiro  du  Cominerre  du  Levant  au  Moyen  Age.  [Germ, 
ed  ]     2  llile.     Leipzig,  1  "iS.VSd. 

Holyoake,  O.  J.     History  of  Co-operation.     2  vols.     Lond..  187r>-79. 

Horton,  8.  Dana.  Silver  and  Gold  in  their  Relation  to  the  Problem 
of  Resumption.     Cincinnati,  1877. 

Monetary  .Situation.     Cincinnati.  187H. 

The  Silver  Pound  and  Kni;land's  .Monetary  Policy  since  the  Restora- 
tion.    London,  18S7. 

Howell,  George.  Synop.sis  of  Report  of  the  Gold  and  Silver  Commis- 
sion,    -  Rinietallic  League.      Loiicjon.  ISSf). 

The  Cohllict.)  of  Capital  and  Lal)or.     I'd  ed.     London,  1S!)(). 

Hubert-VuUeroux,  P.  Les  As.sociations  cooperatives  en  France  et  k 
rLlranger.     I'm  is,  1S81, 

Hudson,  James  P.     Tlie  Railways  of  the  Repuhlie.     New  York.  1830. 

Hull,  Edward.  Tiie  Coal  Fields  of  (iicat  Britain.  3d  ed.  London, 
1  s;:j. 

Humbert,  G.  Traite  Complet  des  Chemins  de  Imt.  2  toni.  Paris, 
1S';(). 

Imports-Duties  from  If  i7  to  188.J,     Cov.  I'uh.]     Washington,  1884. 

Jeans,  J.  8.  I'.ngland's  Sniireniaey,  its  Sources,  Economies,  and  Dan- 
gers.     London,  1S8,"). 

Railway  I'rolilems.     London,  1887. 

Waterways  and  Water  TransjKjrts  in  va.ious  Countries.     London, 

189U. 


660 


ECONOMIC  HISTORY 


Jevons,  W.  Stanley.     Tlie  Coal  Question.     'Jd  cd.     London,  1860. 

Munuy  uiid  llie  Mecliani.sin  of  KxcliaiiKi;.     New  York,  1675. 

'i'lio  Stutu  in  Uelation  to  Labor.     London,  IBS'.'. 

Inve.stifjalions  in  Ciirruncy  and  Kiiianct!.     London,  l.SHl. 

Johns  Hopkins  University.    Studies  in  ili.itoricul  and  I'olitical  Science. 

Vols,  i.-ix.     Ualtiniore,  1»8;{-!(1. 
Johnson,  George.     Grai>liic    Statistics   of   Canada,     [(iov.  I'ul).]     Ot 

tawa,  IHSS. 
Kauffiuann,  R.  von.     Les  Finunues  de  lu  France.     Trad,  de  rAlIfmand. 

I'ari.s,  lt>>sl. 
Kearny,   John  TVatts.      Sketch    of    American    Finances,    1789-1  >s;t."i. 

N«!W  York,  lh«7. 
Kolb,  OeorKB  Friedrich.  Condition  of  tlie  Nations,  Social  and  I'olitical. 

Translation,  edited  and  collated  to  18'\<>,  liy  Mrs.  lirewer.     Lundou 

[18S(I|. 
Kupka,  P.  F.     Die  Verkchr.Hinittel  in  den  Vereinigton  Staatcn  von  Nord- 

anicrika.     L(.'i|iy.i^,',  18h:J. 
Lalor,  John   J     (editor).     Cyclopaedia   of    Pulilical    Science,    I'olitical 

Kconoiny,  and  of  the  I'olitical  History  of  the  L'nitcd  States.     3  vols. 

Chicago.  ISSl-HL 
Lanessau,  J.  L.  de.     L'cxpansinn  colonialc  de  la  France.     Paris,  1861). 
Lange,  F.  A.     Die  Arlititerfrai;e.     Ud  cd.     AVinterthnr,  187."). 
Laughlin,   J.  Laurence.     The    History   of    liiinetallisni   in    the    L'nitcd 

Stall's.      New  York,  188(1. 
Laveleye,  Emile  de.     Bimetallic  Money.     Translated  from  the  French. 

New  Yor'.,  1877. 

I'riniitive  Property.     Translated.     London,  1878. 

La  (pit'stion  nionrtairc  en  l8,S()cl  en  li-iM.     Hrnxelles,  1881. 

Le  hiinelallisnie  internationale.     I'aris,  1881. 

La  nioiniait'  et  le  liinit'tallisnie  international.      Paris,  18!M. 

Lavergne,   L.   de.      The    Kiual    Kconoiny   of    Knirland,    Sen) land,   and 

Ireland.      Translated   from    the    French.      Kdinluir^h    and    London, 

18.".;'). 

lM'onoini(!  I'uralo  de  la  France  depuis  1789.     4"  ed.     Paris,  1870. 

Lavoinne,  B.,  et  Pontzen,  E.     Les  Chemins  de  fer  en  .\nieri(iuc.    2  torn. 

Paris,  Iss-J. 

Le   drvellopenieiit    intellectnel   et  materiel   de   la  Iklgiqne  dcpui.s 

18:i().      Hrux.'lies,  ls«ll.      (Ollicial.) 

Lefevre,  O.  Shaw.     Kr.i;lish  and  Irish  Land  (^iieslions.     Lon<lon.  1S81. 
Legoyt,  A.     La   I'rance  et  I'Ltranger,  I'-tiides  do  slalisliipie  comparce 

•_"■  (-il.      P:iris,  l.s(i."». 
Leroy-Beaulieu,  Paul.     L'administration  locale  en  France  et  en  Angle- 

terre.     Paris.  187[:M. 

La  (luestion  onvriere  an  XI .V  sieclo.      Paris,  1881. 

Traile  de  la  science  di's  (iiiances.     'J""   ed.     2  torn.     Paris,  1879. 

De  la  colonisation  die/,  les  peiiples  modernes.     :$•  ed.      I'aris,  1880. 

I/rital  nidderne  et  ses  fonctions.     I'aris,  ISOO. 

Leslie,  T.   B.  C.      Land   Systems  and    Industrial   Economy  of    Ireland, 
England,  and  the  Continent.     Loinlon,  1870. 


DIBLIOGRAl'lIY. 


551 


11  voii  Xoril- 


Lflvasseur,  Emlle.     La  Question  do  I'Or.     I'nris,  1R')8. 

llisldiru  <lr.s  classi'M  lUivni'n'H  t'li  Krinict)  deiiuis  ia  conquulo  du  Julos 

Ci'sar  jiiHiiii'A  l;i  iU'volutioii.     I'uiis,  Itj.i!*. 

-  lliistuin;  defl  cliis.ies  oiiviiui-fs  «ii  Ftaucu  de{iuia   1789  Jimiiu'ii  iioM 
jours.     '2  torn.     Tiiris,  I8ii7. 

l/v  l^opuliilioii  Fnui<;iiise.     :i  torn.     I'liris,  1881)01. 

Levi,  Leone.     History  of  llriti.sli  Coihiiilmci!.     liil  cil.     London,  l>t80. 

Leyen,  A.  v.  d.     Dii;  iioi'(lmii<>i'ikani.st-lieii  Ki^enbulitien  in  iliren  wirllmt-li. 
iind  polit.  Hir/iciiun^,'!'!!.     Leipzig,  188.'). 

Llebscher,  D.  O.     Japiiii'.s  liinilwirtlisciiafllicho  und  iillgeniuino  wirtlt- 
Hcii.il'ilicliK  ViM'lmitiii.sst'.     .Jcnii,  l>>.'S2. 

Lindsay,   W.   S.     lli.Htoi-y   of   Murcliunt   8lii]>[iiiig.     4    vuls.     Lunduii, 
IsTl-Tii. 

Maoleod,  Henry  Dunning.     Dictionury  uf  rulitical  Kconuniy.     Vol.  i 
London.  l^^'i^S. 

MacCulloob,  J.  R.     A  Dictionary  of  CVuniiierce  und  C'oniineicial  Navi- 
gation.     New  <'d.  r(!vi.s('d  liy  A.  tl    Wilson.      London,  L>8"2. 

Maine,  Sir  Henry  S.     I'.arly  lli.stoiy  of  In.stitntions      London,  1875. 

Viilagii  t'oinniunilies  in  tlm  Ka.st  and  West.     London,  lM71. 

Macpherson,  David       Annals  of  ('oinmt'r<'i'.      I  vols.      London,  180,'(. 
Maraault,   A.      !>•■'•    runvuntiuns   Muinltairu.s  ut  dc  1' Union    Moiu-tairt! 

Latino.      I'aii..  ISiSK. 
Maaon,  David  H     A  .Sjinit  TaiifT  History  of  tlio  Unitfd  Status.    Tart  L, 

178;M7H:t.      C'liifago,  18S1. 
Matthaei,  Fr.      Dii;  \Mrtlisi;lniftlielii-ii   llnifsrinidiini  Uusslaiids.     2  Itdu. 

Divs.lcn,  ls,s:{  und  l^sl. 
Medley,  O.  AV.     'I'lio  'iVado  Dppre.ssion.     I.,ondon.  1885. 
Meyer,   J.     Kin   Ik-itrag  zur  Lusuiig  dcs   \\'aiirungspro(>l<Mns.     Herlin, 

18^7. 
Mittheihingeii   ans  .Justn.s  r<'rlin>s'  trt'ogr.  Anstalt.  (nehst  Krgiin/ungs- 

li.'ft.-n).     W  15dt!.     (iotiia,  18.").')- 1811(1. 
Molinari,  O.  de.     L'Kvolutioii  ('conoiiiiciuo  du  XlXieino  Siecle.     I'ariB, 

l-.so. 
MorHO,  J.  T.     On    tin;    L.iw  of   Ranks  ami   ISanking.     3d  i>d.     2  vols 

lloston,   1888. 
Mulhall,  M.  a.     lialancf-Siioot  of  tin'  World  1870-1880.     l,ond«n.  18S!. 
Murray,  K.  B.    ('onnncrcial  (icogr.'ipliy  coiisidi'it'd  in  its  rflalion  to  New 

Markuts  ami  Kii'lds  of  I'rodni'lioii  for  Hrilisli  'I'radiv     London.  Lss". 
Neumann-Spallart,  F    X.  v.     1'.  licrsiciitcn  der  Wiltwirtiiscliaft.  .J.dir- 

gang  ISSS-lM^'l,  niit  der  vcrgloiclicmlcn  .Statistik  von   lKs;i  |)is  188.'). 

nml  vicliMi  ancli  I^Mi  nnifa.sscndc  N'acliwi'iscn.     .*>liiltc,'iiit,  lss7. 
Neymarck,  A.     'I'lic    I'uMic    DcMs  of   Kuiopo.     ['rransialfd  liy  ().  II. 

Itiorstadt  for  Unidxtn's  iMagazinc]     New  York,  1.S88. 
NlchoUs,  Sir  George.     A  History  of  tiio  Englisii  I'oor  Law.     '2  vols. 

London,  lS."iL 
Nimmo,  Joseph.     Ucpoi  t  on  I'orcigii  Coininerco  of  tli'-  I'nitod  States. 

((;ovt.  Till).]     Wa.sliington,  1870. 
JNoble,  John.     Fiscal  Li'gi.slation,  18l2-18(i,').     London,  1807. 


It'Vi 


.11 


552 


ECONOMIC  JUS  TOR  Y. 


Noel,  O.    Lna  CliciniiiH  du  IVr  eii  Fruuce  ct  a,  Vi'.Unwgcr ;  l^ludo  fiiiaiicibrc 

el  .slatistiiiuo.     I'aris,  lri«7. 

Lfs  liaii(|ii(.'H  ir('ini.-iNiiiii  i-n  Kuroiie.     Idiii.  i.     I'liiis,  188S. 

Oettingeii.  A.  vou.     Dio  Moiulstuiistik.     IJ  Aiill.     KiliiiiKfii,  18f>2. 
Palgrave,  R.  H.  IiigUii.     iSnles  uii  liaiikiii^.     Luiidoii,  1^7-1. 
Pautaleoui,  M.     l)cU'  Aiiiuiiluiu  prubiibilu  della  Uiccliuzza,  t-tc.     Rntna. 

l(5bl. 
Paris,  le  Cointe  de.     'I'lie  Tnido   Unions  of  En{;liind.     [Trans,  liy  J. 

IS'as>iiii  Sriiiiir.  |     London,  Ih(il). 
Payne,  Edward  John.     Ili.-,u>iy  of  Kuioin'un  Colonies.     London,  1877. 
Periodicals. 

IJanliirs  .Ma^ja/.ine,  Tlii!  (lHtG-l.S!)l).     Nfw  York. 

IJiinliers  .Mayazino,  Tin'  (181 1-18!)1).     London. 

Kfononiit:  .loiiinui.     (I'libl.  l>y  ttxt  Itriti.sli  Kcon.  Assoc.)     180L 

Ki'oiioniisI,  'I'lu!  (weekly).     (18l:t-lH!il).     London. 

Giornalo  di'i^li  Kcononii.sti  (fondalo  a  I'lidova  ni^l'  I'^To). 

Julirl)iicii<  r   iiir   Nalionalokonomiu.      Dritlu   Foi^'u.     Zwcitcr  ISund. 

.Ii-na,   ISDI. 
Journal  of  tli.-  Stati.stieid  .Sod.-ty  (18:J8-18(n).     London. 
Journal  des  ('x'ononiistes.     5(1"  Annei'.      I'aiJM,  Ibl'l. 
Journal  de  la  Socititu  de  Statisli(iue  de  I'aris.     XXXI  Heme  Aiindc. 

18!n. 
L'F.cononiiste  Franvais.     10"  Aiindfi.     Tuiis,  18!tl. 
>i'utioiialokononiisl  Ud.skrifl.     Udgivetaf  W.  Seiiarling.    Coponliagen, 

18111. 
roiitii-al  Science  Quarterly.     (Edited  by  tlie  Faculty  of  Political  Sci- 
ence of  ("oluniliia  College.)     (l88ti-181>l.)    (jinii&Co.,  Itoston  and 

New  York. 
Quarterly  ilournal  of  Kcononiics.     (I'iil)lislied  for  Harvard  University 

liy  (ieori^e  11.  Kllis.)     (188(;-I8!n.)     Koston. 
Quarterly  I'ulilioations  of  Hid  American  Stati.sticui  A.s.sociation  (I).  R. 

Dewey.  See.)     New  Series  (1888-18'>1).      Hoston. 
Ke\ue  d'Kcononiie  l'()liti(|U(!.      Annee  \'.      I'aris,  1S!)1. 
StnlihtiM'lies  Monatsdirift.     Jalirg.  XVil.     N'ienna,  ISOI. 
Zeilsclirifl  f.  d  g.  Staalswirtlis(;lialt      Jahr.  .\lvii.     TuKingen,  1R01. 
Picard,  A.     Les  CliemiiiH  de  Kei' Frani,'ais.     (i  torn.     I'aiis,  1^81-l8So. 

Traite  des  C'heniins  de  For.     4  torn.     I'ai'is,  1887. 

Pitkin,  Timothy.     A  Statistical  View  of  the  Commerce  of  the  United 

Slates  of  America.     New  and  enl.  ed.     New  Haven,  18.'i7. 
Plener,  E.  E.  von.    The  Knylish  Factory  Legislation.    [Translated  from 

the  derman.]     I^nndon,  1.^7:! 
Pollock,  F.      The  Land  Laws  (ISrilisIi).     London,  1880. 
Poole.  W.  F.     JMilex  to  rerioilical  Literature.    Hoslon,  188L'.    1st  Supp. 

18SS.      (S<>e  ret'er'-nees  to  eeonomical  artiele.s  ) 
Poor.  Henry  V.    Manual  of  'he  Railroads  of  the  United  States.     1808- 

18!»1  (annual). 
Sketch  of  the  Riso  and  Progre.ss  of  the  Internal  Improvements  of 

the   United    States.     (Reprinted  from  the   .Manual  of  Railroads  for 

1881.)     New  York    1881. 


11  c: 


DIULWGRAPUY. 


653 


Porter,  O.  R.     Tlio  Progress  of  tlio  Nation.     Now  od.     Lomlnn,  IS.M. 
Preble,  Henry.     History  ol  SUMin  NiiviKulion  I.jIJI-IM-^-'.     I'liil.,  HM. 
Prentice,  Aichlbcild.     lli.lory  of  Ihu  Aiili-L'orn  l.uw  Luttjjue,     :J  voU. 

1/ nil  lull,    I  >>.')•}.  ' 

Prico,  Boncuny.     Currency  iind  Hankiiiff.     Lomlnn,  1870. 

Price.  F.  G.  H.     A   llamlltook  ot    Lomlon   15iinkiT.s,  willi  somo  Arcoiuit 

of    Ilicir    rndL-ucsMirtt,    llio   Karly    (jolil.suiilln.     [Knlartjid  cdiiiou.J 

Liiinloii,  \^\)\. 
Proidlion,  P.  J.     l/lnipot  sin-  lii  K<'vonu<i.     I'iiris,  181>S. 

llr-'iiiii'  clc  hi  (^iii'siion  Sociiilu,  Itiiniiuc  (l'Kcliiinno.     I'liris,  ISIO. 

Rawson,  R.  W.     TitiillH  iinJ  Tniiio  of  Uio  lliiiisli  Kmiiire.     London, 

Ibns. 

.Sonucl  to   .Synojisis  of   llie   Tariirs    and   Trades  of  the   Driliah 

Kinpii'it.     London,  1.S6!). 

ReisB,  J.  J.       I'lii'  ludnstrii's  of  Japan.     [lleHearcli  niado  for  llio  IVus- 

si. Ill  (iovi'iiiini'iit,  tiansiali'd  ]     New  York,  IHISI). 
Repoit  ui  ilii>  liitiMiialioiial  .Munt'taiy  Coinnii.s.sion  held  in  Taris,  Aug., 

1,-mS,     [(iovt.  I'lili-I     Wasiiiiigton,  1S7!I. 
Report  on  Wool,  Simcial.     [(Jovt.  I'ub.]    Wasliin>,'tnn,  18s7. 
Reports  of   tliu    I'liittM]  Stales  ^lonetary   Coniniissiun.     [(iovt.   I'lib.] 

\Va>lllhHlnn,  1877. 
Report  oil  liiiiut;illi.sin  in  Kuropo.     Senate  Exec.  Doc.     Vol.  i.     \Va.sli. 

(iovt    I'r.  Of.,  18S7. 
Rlohardson,  Oeorge  Oibson.    The  Corn  and  C'altio  Producing  Districts 

of  Kiaiifc.     London,  1878. 
Richelot,  H.     Ia!  ZoUvcicin.     2o  dd.     Paris,  IS.".!). 
Riugwalt,  J   L.     Duvulopnient  of  Tran.sportation  in  the  I'nitcd  States, 

I'hil..  isss. 
Rogers,  Jsmea  B.  Thorold.    Six  Centuries  of  Work  and  Wages.     I^ou- 

don,  is-il. 
^—     A  History  of  Agriculture  and  Prices  in  Kngland.    (J  vols.    London, 

1.S8S. 

Tiic  Kcnnoinic  Intcrpn'tation  of  History.     London,  N.  Y.,  ls.s8. 

Till'  Iiidiistiial  and  Coniint-'icial  Supnnnacy  of  Kngland.    Lditcil  hy 

Arlliiir  lio.ror.'?.     N.  Y.     [Aiinonnccd.] 

RothBchilcl,  Arthur  do.     Histoirn  dc  la  I'ostn.     2'' I'd.     Paris,  187:5. 
Sacli    Isidore.     L' Italic,  si's  finanofs  ct  .son  (U'Veloppcini'iit  ('cononiiiiuo, 

18.'.!)-ls8l.     Paris,  1S8.'). 
Salmon,  C.  S.     'i'he  Crosvn  Colonies  of  (Meat  Hritain.     (Cobdc!)  Club.) 

London,  1880. 
Samuelson,  J.     India.  Past  and  Piosont.     liOndon,  lisOO. 
Sax,  Erail.    Din  X'l'rki'iirsniiLtcl  in  \'olks-und  Staalswirtlisuhaft.     2  Hde. 

Wi<»n,  1878-80. 

Dio  KistMiliiihnon.     Wion,  1870, 

Say.  J.  B.     Dictionnaire  d<>s  riii.nncos.     torn,  i.,  .A-D.     Paris,  1880 
Scherzcr,  K.  v.     D.is  wirllisciinfilicho  r^obcn  di'i-  \'olki'v.     L'-ip/iu'.  188.1. 
• und    Bratta^sevi,   E.       Dcr    wirtliscliiiftliclic    Voiki'iir   diT   (ie- 

genwiirt.     Ziiiclcii-li  Krgiingzungslieft  zu   Scliurzer's  wirtli   Lcben  der 

Volker.     Wicn,  1891. 


IMAGE  EVALUATION 
TEST  TARGET  (MT-3) 


/ 


O 


{■/ 


'W 


Q'.r 


/ 


i/x 


i/. 


1.0 


I.I 


'■   ilM    111112^ 


IIU 

[IIMO 


12.0 


1.8 


1.25 

1.4 

1.6 

^ 6"     - 

► 

7 


<? 


^ 


/a 


/J 


'c 


/A 


<$>. 


O 


/ 


Photographic 

Sciences 

Corporation 


s. 


4? 


V 


s 


V 


1^ 


•v^ 


\\ 


«.' 


6^ 


% 


n? 


'^ 


73  WEST  MAIN  STREET 

WEBSTER,  N.Y.  )4S80 

(716)  872-4503 


€* 


/^ 


6*. 


i/x 


^ 


554 


ECONOMIC  HISTORY. 


M  ' 


SchmoUer,  Gustav.    Zur  Geschichte  der  deutschen  Kleingewerbe  in  19 

Jaliiliuudurt.     Halle,  1870. 
Stauts  uiid  social wissenschaftlich  Forschungen.     9  Bde.     Leipzig, 

1870-90. 
Schoenhof,  J.     The  Industrial  Situation.     New  York,  1885. 
Schouberg,  G.     Handbuch  der  Politisclieu  Oekonomie.    3  Bde.,  2'"  Aufl. 

TuhiiigiMi,  1885. 
Schbttle,  G.     Der  Telegraph  in  administrativer  und  finanzieller  Ilin- 

siclit.     Stuttgart,  1883. 
Schreiber,  J.  P.     Das  Tarifwesen  des  Eisenbahnen.     Leipzig,  1884. 
Scrivenor,  H.     History  of  the  Iron  Trade.     ].,ondon,  1854. 
Seybert,  A.     Statistical  Annals  of  the  United  States.     Piiil.,  1818. 
Sheffield,  Lord.    Observations  on  the  Commerce  of  tlie  American  States. 

Gtli  ed.     London,  1784. 
Sherman,  John.     Selected  Speeches  and  Reports  on  Finance  and  Taxa- 
tion, 1859-1878.     New  York,  1879. 
Smiles,  Samuel.     Industrial  Biography.     Boston,  18G4. 

Lives  of  the  Engineers.     4  vols.     London,  18G2-81. 

Smith,  Adani.     Wealth  of  Nations.     (Bohn's  ed.)     2  vols.     London, 

1887. 
Soetbeer,   G.   Adolf.     Die  fUnf  Milliarden.      Von  Deutsche  Zeit  und 

Streitfragen.     Berlin,  1874. 
Fdelmetall-Production.     In  Petermau-'.'s  "  Mittheilungen  "  Ergiin. 

zungsheft  No.  57.     1879. 
— — Deutsche  Miinzverfassung.   4  Abth.  (in  2  vols.).    Erlangen,  1874-81. 
Spaulding,  E.  G.     History  of  the  Legal  Tender  Paper  Money  issued 

during  the  Great  Rebellion.     Appendix,  1873.     Buffalo,  18C9. 
Statistical  Abstract  of  the  United  States.     [Govt.  Pub.]    Washing- 
ton, 1879-1891. 
Statistical  Abstract  for  the  United  Kingdom.     3Sth  Number.     Lon- 
don, 1891. 
Statistical  Abstract  for  the  Colonial  and  other  Possessions  of  the 

United  Kingdom.     London,  186'2-1891. 
Statistical  Abstract  for  British  India.     25th  Number.     London,  1891. 
Stein,   Lorenz    von.      Lehrbuch  der  Finaiizwissenschaft.      2   Theile, 

Funfte  Aufl.     Leipzig,  1885-80. 
Stourm,  Rene.     Les  Finances  de  I'Ancien  Regime  et  de  la  Revolution. 

2  totn.     Paris,  1885. 
Cours  de  Finances.     Le  Budget,  son  Histoire  et  son  Mecanisme. 

Paris,  1890. 
Stvirmer,  G.     Geschichte  der  Eisenbahnen.     2  Th.  Statisticbe  Darstel- 

Inng  fiir  1871-1875.     Bromberg,  1876. 
Sumner,  William  G.     A  History  of  American  Currency.     New  York, 

1874. 
Swank,  James  M.     History  of  the  Manufacture  of  Iron  in  all  Ages. 

Phil.,  1884. 
Sybel.  Heinrich  von.     History  of  the  French  Revolution.     [Trans,  from 

3d  Germ,  cd.]     4  vols.     London,  1867-69. 
Taine,  H.  A.    The  Ancient  Regime.     (Trans.)    N.  Y.,  1876. 


BIBLIOGRAPHY. 


555 


Taine,  H.  A.    The  French  Revolution 
Taylor,  W.  C 


Taussig,  F.  W. 

1888. 
Thornton,  Wm 
Tikhomirov,  L. 

ing.]     2  vols. 
Tocqueville,  A  de 

lutiou  of  1780. 


3  vols.    N.  Y.,  1878-85. 
History  of  the  Factory  System.     London,  1880. 
The  Tariff  History  of  the  United  States.    New  York, 


T.     On  Labour.     London,  1870. 
Russia,  Political  and  Social.     [Translated  by  E.  Avel- 
London, 1887. 

On  the  State  of  Society  in  France  before  the  Revo- 
(Traus.)     2d  ed.,  Lond.,  1879. 


(Trans.)     N.  Y.,  1876. 
I  Newmarch,  Wm.     History 


The  old  Regime  and  the  Revolution. 

Tocke,  Thomas,  and  [5th  and  Gth  vols. 

of  Prices,  1793-18.515.     6  vols.     London,  1838-57. 
Toynbee,  Arnold.    The  Industrial  Revolution.     London,  1884. 
Tucker,  George.     Progress  of  the   United  States  in  Population  and 

Wealth.     New  York,  18-13. 
nirich,  Franz.     Das  Eisenbahntarifwesen.    Berlin,  1886. 
Ure,  Andrew.     The  Cotton   Manufacture  of  Great   Britain.     2  vols. 

London,  1S36. 
Useful  Metals  and  tueir  Alloys.     (Various  writers.)     London,  1861. 
Viihrer,  A.     Histoire  de  la  dette  publique  en  France.     2  torn.    Paris, 

188(3. 
Vuitry,  A.     Regime  Financier  de  la  France  avant  la  Revolution  de  1789. 

Nouv.  serie.     2  torn.     Paris,  1883. 
Wagner,  Adolph.     b'inanzwisseuschaft.     1  Th.,  3  Aufl.    Leipzig,  1883. 

2Th.,1880.    3  Th.,  1889. 
Walker,  Francis  A.     Statistical  Atlas  of  the  United  States.    New  York, 

1875. 

Money  in  its  Relations  to  Trade  and  Industi-y.     New  York,  1S79. 

Money.     New  York,  1883. 

Watts,  John.     The  Facts  of  the  Cotton  Famine.     London,  1866. 
Weber,  M.  M.  v.     Nationalitat  und  Eisenbahnpolitik.     Wien,  1876. 
Der  Staatliche    Einfluss   auf  die   Entwickelung  der   Eisenbahnen 

minderer  Ordnung.     Wien,  1878. 
Weeden,  W.  B.     Economic  and  Social  History  of  New  England,  1620- 

1789.     2  vols.     Boston,  1890. 
Wells,  David  A.     Our  Merchant  Marine.     New  York,  1882. 
Practical  Economics.     A  series  of  Essays  respectins;  certain  of  the 

recent  Economic  Experiences  of  the  United  States.     New  York,  1888. 

Recent  Economic  Changes.     New  York,  1889. 

White,  George  S.    Memoir  of  Samuel  Slater,  connected  with  History  of 

the  Rise  and  Progress  of  the  Cotton  ^lanufacture.     Phil.,  183f). 
Whitney,  J.  D.     The  United  States.     Facts  and  Figures  illustrating 

the  Physical  Geography  of  the  Country  and  its  Material  Resources. 

Boston,  1889. 
Wilson,  A.  J.     The  Resources  of  Modern  Countries.     London,  1878. 
Wirth,  Max.    Geschichte  der  Handelskrisen.     2'"  Auflage.     Frankfort, 

1874. 
Die  Quellen  des  Reichthuma  mit  RUcksicht  auf  Geschiiftstockungen 

und  Krisen.     Kobn,  1886. 


^Il^l 


'iii 


656 


ECONOMIC  HISTORY. 


Wright,  Carroll  D.     Histoiy  of  Wages  and  Prices  in  Massachusetts, 

17u:2-18«;j.     Boston,  18S5. 
Wyckoff,  'Wm.  C.     American  Silk  Manufacture.     New  York,  1887. 

Tlie  Silk  Goods  of  America.    2d  ed.     New  York,  1880. 

W^estgarth,  William.     The  Colony  of  Victoria.     London,  1864. 
Vi''olf,  D.  J.     Tiiatsachen  uud  Aussichten  der  ostindiachea  Concurrenz 

ini  Weizeiihaudel.     Tubingen,  1880. 
YeatB,  J.     Growth  and  Vicissitudes  of  Commerce  in  all  Ages.    3d  ed. 

London, 1887. 

Recent  and  Existing  Commerce.     3d  ed.     London,  1887. 

Young,  Arthur.     Travels  in  France,  during  the  years  1787,  1788,  1789. 

[New  abridged  ed.  with  introduction,  biographical  sketch,  and  notes 

by  I'l.  Betiiarn  Edwards.]     London,  1884. 
Tour  in  Ireland.     [With  introduction  and  notes  by  A.  W.  Hutton.] 

London,  1891. 
Young,  Edward.     Special  Report  on  the  Customs  Tariff  Legislation  of 

the  United  States.     [Govt.  Pub.]     AVa.shington,  1872. 
Labor  iw  Europe  and  America.     Wash.  Govt.  Pr.  Office;  also,  Phil., 

1875. 


INDEX. 


Ad  vALoitKM  duties,  principle  of,  186. 

Agrioultiira,  systt'in  of,  in  tlie  IStli  cen- 
tury, 08;  in  tlie  lOtli,  ')•);  injured  by 
commercial  lej^islution,  07;  importance 
to  Gennaii  V  of,  181 ;  con(liti(m  oC,  in  I'-n;;- 
land,  212,  215,  219,  22l);  in  Ireland,  23^- 
237;  Italian,  303;  effects  of  impro^e- 
menls  on,  211,  313-310,  320-321. 

Alsace-Lorraine,  5(),  330. 

Ancien  rc'fjime,  budi^et  of,  75. 

Anjon,  systiMU  of  nii'tairie  in,  02. 

Annuities,  conversion  of  perpetual  into 
terminable,  140-1  tl. 

Anti-(Jorn-Law  Leai;ue,  formation  of,  214; 
object  of,  210;  inlluence  of,  218.  22!). 

Arkwrljjlil,  Sir  Kiiliard,  bis  invention  of 
tbe  water-frame,  31),  40,  12i). 

Army,  orf^anization  of,  under  Louis  XVI., 
83;  absence  of  standing,  in  America, 
417,  422. 

Artois,  (iiarles.  Count  of,  his  opposition  to 
reform,  73. 

Auerstiidt,  87. 

Atkinson,  Kdward,  208,  318,  410,  546. 

Augustus,  Kmperor,  27. 

Australia  and  California,  effect  of  gold  dis- 
coveries in,  250,  204-200,  277-270. 

Austria,  advantage  ot  Suez  Canal  to,  302; 
finamial  crisis,  357,  3.50,  ;i(i3;  national 
wealth  of,  470  ;  business  failures  in,  503. 

Auvergne,  peasants  of,  oppose  reform,  80. 

Baltic  ports,  hampered  by  Sound  dues, 
180. 

Banks  of  Kngland  aiul  ot  France,  fluctua- 
tions in  rate  of  discount  of,  406-497. 

Basic  steel,  ,541. 

Baxter,  Dudley,  estimate  of  British  income 
by,  474. 

Beddoes,  Dr..  assists  Pavj'.  .52. 

Belgimn.  417,  483,  48."),  400.  500.  .507. 

Bell,  Mr.,  inventions  of,  for  printing  cali- 
coes, 43-44. 

Belligerent  and  neutral  rights,  conflict  of, 
116. 


Berkeley,  Bishop,  449. 

Berlin  decree,  Uii. 

Bertbollet,  M.,  his  experiments  in  bleach- 
ing, 43. 

Bessemer  steel,  312,  324,  438,  442,  448, 
530,  540. 

Blockade,  neutral  demands  respecting,  100. 

Bolton,  adopts  oott'm  manufacture,  35; 
birthplace  of  Arkwriglit  and  Cronipton, 
213;  comparison  with  Lowell,  416. 

Boot  and  shoe  industry,  displacement  of 
labor  in,  by  machinery,  320. 

Boulton,  Mr.,  of  Soho,  his  connection  with 
Watt,  40. 

Boinse,  (!u',  04. 

Bradford,  dependent  on  the  wool  trade,  32. 

Br,azil,  0,  14. 

Bread,  cost  of  manufacture  and  distribu- 
tion, .321. 

Bietagne,  .5,  6,  82. 

Brienne.  ministry  of.  81. 

Bright,  John,  214. 

Britain,  see  Great  Britain. 


Camfornia,  see  Australia  and  California. 

Calonne,  ministry  of,  75;  statement  of  mil- 
itary expenses,  78;  new  measures  by, 
80;  dismissed,  81. 

Canada,  Frcndi  colony  of,  long  under  the 
government  of  an  exclusive  company,  8. 

Canada,  Dominion  of,  its  growth,  1807- 
18!I0,  .525. 

Canal,  Suez,  economic  effects  of  its  con- 
struction, 300-304. 

Carrying  tride,  on  the  ocean,  revolution 
of,  305-300;  on  the  land,  revolution  of, 
.300-317. 

Chanipaune,  land  owners  in,  56. 

China.  308,  413.  415. 

Church,  revenue  of,  in  1875,  76. 

Clearing  houses  of  London  and  New  York, 
returns  of,  401. 

Coal,  difticnities  in  mining,  51;  industrial 
revolution  due  to,  54;  reduction  in  con- 


■y   • 

1 

Ihi              > 

^ 

i 

iM'^ '  ' 

< 

M' ' 

i 

i 

^p 

K 

ml ,  ; 

( 

kHk            ^ 

>. 

H^      ' 

^ 

sn- '"" 

i 

558 


INDEX. 


sumption  of,  by  ocean  steamers,  307; 
effect  of  machinery  on,  319 ;  use  of  m\- 
tliracite,  41U;  increase  in  ]]ro(luction  of, 
485;  waf^es  in  ininin;^  of,  405;  produc- 
tion of,  in  Canada,  525;  pussesbiuu  of, 
by  llic  Soutli,  530. 

Cobden,  Ititliard,  and  the  Anti-Corn-Law 
League,  214;  on  the  corn  laws,  217,  232. 

Colljcrl,  manufactures  encouraged  by,  (iU, 
C7. 

Colipilioun,  Mr.,  speecli  of,  231. 

Collie,  Messrs,  fijilure  of,  3.')fi,  364. 

Colonies,  ancient  Greek  and  Roman,  3  ; 
Spanish,  4;  l'ortuf?uese,  5;  of  Holland, 
7;  of  France,  8;  rapid  proj^ress  of  Knj;- 
lisli,  !),  2G ;  exclusive  companies  injuri- 
ous to,  13;  the  trade  of  Uritish,  how 
resulated,  14-2(),  511-514;  the  different 
kinds  of  non-enumerated  commodities 
specified,  15;  enumerated  commodities, 
17;  restraints  uimn  their  manufactures, 
20;  favored  by  Britain,  22;  except  as 
to  foreipin  trade,  24;  little  credit  due  to 
European  policy  for  success  of,  28; 
their  chief  indebtedness,  men,  30;  Kuf;- 
lish  interference  with  trade  of  French, 
111-112. 

Commerce,  restraints  on  by  exclusive  com- 
panies, 13-14;  by  navigation  acts,  15, 
511;  F'rench,  fettered  by  pnilds,  05; 
effect  of  American  Non-intercourse  Act 
on,  121 ;  policy  of  France  towards,  under 
the  Restoration,  1G8;  of  Zollverein,  178- 
180,  181);  treaties  of,  l!t8,  2!)2-2!)(l ;  effect 
of  Suez  Canal  on,  300-304  ;  improved 
transportation  and,  307,  -'lOO,  48!) ;  con- 
dition of  foreiLjn.  an  economic  symptom, 
4i)l  ;  of  Cannda.  525. 

Commonable  Fields,  102. 

Contraband  of  war,  neutrals'  demand  re- 
spectin};,  lOfl. 

Corn  laws,  object  of,  207  ;  of  1801,  207  ; 
of  1804.  20!):  of  1810,  200;  of  1828.  213; 
new  law  of  1840,  231;  report  of  com- 
mittee on,  208;  injurious  effects  of,  211; 
formal  ion  of  Aiiti-('orn-l,aw  League,  214; 
Mr.  Villiers  on  the,  215  ;  Sir  Robert 
Peel's  opinion  of,  219;  the  slidinp;  scale, 
220  ;  policy  of  I'eel  towards.  230  ;  linal 
nvii>^ur>'  of  graduiil  renenl,  231  ;  their 
reliition  to  the  new  Rold,  282. 

Corporations,  restrictions  on  trade,  im- 
posed by,  05. 

Cotton,  early  nninnfacture  of,  34;  inven- 
tions which  have  developed  the   manii 
facture  of,   30-43;    the   factory  system 
illustrated    by    its    manufacture,    407 ; 
statistical   and   economical   comparison 


of  its  manufacture  in  Great  Britain  and 

the  United  States,  400-417;  the  extent 

of  its  production  an  economic  svmptoin, 

485. 
Cotton-gin,  invented  by  Eli  Whitney,  405. 
Crises  and  revivals,  periodicity  of,  355,  357, 

373,  483,  509-510.     See  Depression. 
Crompton,   Samuel,  his  invention  of  the 

mule,  41. 


Dakota,  wheat  product  of,  320  ;  settle- 
ment of,  ;)92,  393,  397. 

Davy,  Sir  H.,  his  early  career,  52  ;  invents 
safety  lamp,  53. 

Decree,  Berlin,  Nov.  21,  180G,  110  ;  at 
Warsaw,  1807,  117  ;  Milan,  Dec.  17, 
1807,  118;  of  St.  Cloud,  Sept.  12,  1810, 
118  ;  of  Fontainebleau,  Oct.  19, 1810, 118. 

Deficit  of  1787,  80. 

Depression,  economic,  of  1873-1870,  355 ; 
universality  of,  356-358,  473  ;  a  cause, 
the  failure  of  foreign  investments,  358- 
304;  mildness  of  its  effects  in  the  United 
Kingd<an,  304-308  ;  question  of  its  con- 
tiniumce  discussed,  369-373;  existence 
of.  from  1873  to  1879,  proven  by  statistics 
and  economic  sympt(Mns,  409-510;  fol- 
lowed by  a  revival,  1870-1883,  similarly 
presented,  46!)-510;  and  renewed  depres- 
sion of  1883-1885,  473-510, 

Dettes  publl(pies,  chap,  xv.;  augmentation 
des,  depuis  1870,  450-452  ;  dc'penses  de 
la  guerre,  de  la  marine,  capital  nominal 
et  interets  des  dettes,  453  ;  conversion 
de  rentes,  454  ;  abaisscnient  du  toiix 
depuis  1870,  359 ;  modes  d'l'inission, 
301;  repartition  des  fonds  publics,  462: 
nc'gocialion  des  rentes  fran(;'aises  aux 
sources  ('•trangeres,  303  ;  revolution 
t'cononiiqne,  305. 

Di-count,  rates  of,  in  1873,  350;  variations 
in,  an  economic  symptom,  490-497. 

Disturbances,  economic,  since  1873,  an  ex- 
plainifion  of,  321-322. 

Domingo,  St.,  French  colony  of,  9. 

Douanes,  K^gishition  affectant  les,  108;  les 
recettes  des,  du  zollverein,  202. 

Dudley,  Dud,  discovers  a  mode  of  smelt- 
ing iron  with  coal,  50. 

Dutch  settlements  in  America,  slow  im- 
provement of,  owing  to  government  of 
an  exclusive  company,  7. 

Duties,  modes  of  levying,  185-188. 


l^;riiEU,R  mobile,  154. 
Edict  of  Stein,  see  Stein. 


INDEX. 


659 


Edicts  of  Hardeiiberg,  see  Ilardciiberg 

P'gypt,  cotton  of,  415. 

Electricity,  Industrial  use  of,  325;  future 
cftwtH  of,  uOi). 

Employnicnt  of  labor,  changing  conditions 
of,  '318-;i21,  aa.l,  4(I7;  advantages  ef 
America  in  tlie,  417-428,  condition  of, 
an  economic  symptom,  5(l'i-5U5. 

Englauil,  linancea  of,  17'Jii-1815,  cliap.  vi.; 
a  new  system  introduced  by  Mr.  I'itt  in 
171)7,  12ii;  new  impot^t  called  the  triple 
assessment,  127;  income  tax  imposed 
and  repealed,  127-128;  explanation  of 
partial  prosperity  under  heavy  taxation, 
128-121);  inventions  rescued  England 
fnjm  linancial  rinn  caused  by  French 
war,  12:)-1;)1 ;  iimoiint  of  expenditure 
during  the  war  (171):)-181.')),  lUl ;  quota- 
tions from  Sir  John  Sinclair's  work  on 
the  Revenue  containing  forebodings  of 
linancial  distress,  l;J2-133;  amount  of 
public  debt  at  successive  periods  from 
1736  to  1810,  132-133,  13(J;  tabular  state- 
ment of  public  income  and  expenditure, 
1792-184!),  134;  amount  aised  on  loan, 
etc.,  135;  delusive  nature  of  the  sinking 
fund,  13(1-137,  142;  inconsistent  meas- 
ures adopted,  dead  weight  annuity,  con- 
version of  perpetual  into  terminable 
annuities,  13S)-142;  balances  of  income 
and  expoiuliture,  17'J2-1850,  143-144; 
excess  of  expenditure  over  income  dur- 
ing the  period  of  war,  and  excess  of 
income  during  subsequent  peace,  144; 
316  years  of  peace  required  to  cancel 
debt  of  24  years  of  war,  144-146.  See 
Great  Britain. 

Europe,  colonial  policy  of,  1-28;  little  to 
boast  of,  28-21);  except  in  the  contribu- 
tion of  men,  30;  the  army  in  her  revolu- 
tionf,  83;  failure  of  rye  crop  in,  234; 
rise  of  prices  in,  due  to  new  gold,  25.5, 
2.57;  drain  of  silver  from,  to  the  East, 
275;  elfect  of  Suez  Canal  on  the  com- 
merce of,  302;  financial  crises  in,  357; 
rapid  advance  ni  her  cotton  manufactures, 
407;  advantages  of  America  for  compe- 
tition with,  417-427;  economic  changes 
in,  469-473,  ,508-510;  the  wealth  of,  474- 
477;  her  indebtedness,  450-468,  543- 
544. 


Famines,  prevention  of,  31.3. 

Feudal  system,  the,  described,  57-68;  over- 
throw of,  in  France,  84. 

Finances,  diffiiidtics  of,  Louis  XVI.,  77-79; 
Indicioug  policy  of  Sir  Robert  Peel,  221- 


229.  See  England,  la  Restauration,  la 
France  sous  le  second  empire,  French 
Indemnity. 

Flanders,  small  proprietors  in,  66,  62. 

Flour,  displucement  of  labor  iu  the  inauu- 
facture  of,  320-321. 

Foville,  A.  (le,  475,  493. 

F'rance,  the  trade  of  her  colonies,  how  reg- 
ulated, 15;  the  goVLrument  of  the  colo- 
nies conducted  with  moderation,  25;  the 
sugar  colonies  lietler  governed  than  those 
of  Britain,  26;  Huguenots  from,  settle 
in  I'Jiglaiid,  46;  rurid  nobility  and  peas- 
ant population  of,  55-63;  condition  of 
towns,  63;  of  trade,  65;  of  tnamifac- 
tures,  60;  decline  of  national  prosperity, 
68-70;  efforts  of  reform  under  Louis 
XVI.,  71;  resistance  of  privileged  classes, 
72;  the  budget,  75;  general  di-solution 
of  order,  82;  the  army,  83;  final  catas- 
trophe, 84;  permits  colonial  trade  to  neu- 
tral ships,  111-116;  restrictions  on  this 
trade  by  Fnglish  orders  in  council,  116, 
117;  blockade  of  her  ports  by  ICngiand 
118;  la  Restauration,  148-169;  potato 
disciise  appears  in,  234;  elT.cts  of  new 
gold  in,  251;  sous  le  second  empire,  284- 
297;  payment  of  indemnity  liy,  32(i-350; 
investments  of,  in  new  countries,  3.5!);  in- 
crea-e  of  her  public  <Ielit,  451 ;  sells  Lou- 
isiana to  the  United  States,  382:  irational 
wealth  of,  475;  invested  capital  of,  .500; 
business  failures  in.  503;  reciMit  tluctua- 
tions  of  trade,  488,  490,  492.  50!). 

F^ ranee,  la,  sous  le  secoiul  empire,  c'lap.  xi. ; 
le  credit  foncicret  le  credit  moliilier,  284; 
anlciir  de  la  sp('culation,  285:  la  crise  de 
1857  et  ses  suites,  286;  dc'veloppement  du 
cn'dit,  287;  nouvcau  systeme  de  conces- 
sion des  chemins  de  fer,  287;  Ics  grandcs 
compagnies,  288;  midliplications  des 
nioyens  de  communication,  289;  prngres 
du  commerce  extcrieur,  290-'i91  ;  le  si'^na- 
tiis  consultedn  25  dec,  1852, 2!)2;  nu-sures 
relatives  ii  la  disette.  2n2;  premiers  de- 
grevcments,  2!)3;  oxpo.iiti(in  de  1855,  293; 
projet  de  supprimer  Ics  prohibitions,  294; 
left  re  du  5  Janvier,  1861);  le  traitc  de  com- 
merce avec  I'Augleterre,  295;  autres 
traites,  296. 

Frederic  the  Great.  93. 

F'reileric  William  III.,  edict  of  emancipa- 
tion, 95.  J 

Free  ships,  free  goods,  neutral  demands  of, 
109. 

Freight  rates,  reduction  of,  .307,  .300. 

French  Indemnity,  payment  of,  a  vast 
transaction,  326;  conditions  under  which 


O 


u 


560 


INDEX. 


payment  was  to  be  made,  320,  .I.^O  ;  jjon- 
erul  process  of  payment,  'i'AY-'M'i  ;  piull- 
culiir  n  eniis  employed,  333-337;  bills 
how  iibtaitiiilile  for,  338-340;  relation  of 
l''reii(jli  Iradc  to,  341 ;  movement  of 
preeioiis  metals  an  el  -ment  in,  343-347  ; 
strikiiii;  fails  sii|,'f,'eNled  by,  348  ;  tri- 
umph over  obstacles  in,  34'J-350,  appli- 
cation of,  the  various  items  classilied, 
350-353. 

French  Uevolutinn,  the,  division  of  classes 
before,  55  ;  division  of  property,  50; 
feudal  system,  57,  Gl ;  rural  nobility, 
58;  town  government,  04;  the  guilds, 
65  ;  restrictions  on  manufactures,  00  ; 
wealth  of  Krance  at  the  period  of,  08  ; 
in  manufactures,  08  ;  in  agriculture,  O'J  ; 
in  commerce,  70  ;  schemes  of  reform, 
71-75;  the  budget,  75-70;  inequality  in 
distribution  of  taxes,  77;  expenses  of 
the  court,  78;  the  army,  83  ;  the  ancient 
polity  destroyed,  84. 

Fronie  adopts  the  cotton  manufacture,  35. 

Gallatin,  Albert,  report  of,  406. 

Germany,  social  and  agrariiin  clianges  ef- 
fected in,  by  Stein  and  Hardenberg,  80- 
108;  her  neutral  markets  glutted  during 
the  war  17i>3-181.'i,  110  ;  formation,  ob- 
jects, and  adniinistraliiin,  of  the  ZoUver- 
ein,  170-200  ;  effect  of  the  new  gold 
upon,  255,  257,  201;  payment  of  indem- 
nity to,  by  Fr;\nce,  320-350  ;  application 
of  the  indemnity  by,  350-354;  financiul 
depression  in,  in  1873,  350,  357,  361  ; 
the  change  in  her  monetary  system,  308; 
increase  of  her  public  debt  since  1870, 
451;  American  advantages  in  manufac- 
ture over,  417-425;  national  wealth  of, 
475-470,  480;  recent  economic  progress, 
322,  483,  485,  488,  403-490,  500,  509 ; 
her  penple  the  largest  element  m  recent 
American  immigration,  500. 

Giddy,  Davies,  his  acquaintance  with 
Davy,  52. 

Giffen,  Rubert,  economic  investigations  of, 
355,  474,  49.),  501,  500.  548. 

Glidstone,  .Mr.,  217. 

Gloucestershire,  dependent  on  the  woollen 
trade,  32;  Koman  iron  works  in,  50. 

Gold,  an  element  in  payment  of  French 
indemnity,  32:i,  333,  .TiO,  343-340,  349; 
a  special  iidvauee  <A,  nmde  by  the  Bank 
of  I'rance,  332,  334;  its  production  in 
British  Colmnbia  and  Nova  Scotia,  525. 
Sk  New  (!(ild. 

Grain,  vaiations  in  prices  of,  in  the 
17th  century,  315 ;    effect  of  improved 


transportation  on  prices  of,  311-317. 
See  Corn  Laws. 

Great  Britain,  progre.ss  of  her  American 
colonies,  9-13;  the  trade  of  her  colonies, 
how  regulated,  14;  distinction  bc^tween 
enumerated  and  unenumerated  commodi- 
ties explained,  15;  restrains  manufac- 
tures in  An\erica,  20;  privileges  granted 
to  her  colonies,  22;  constitutional  free- 
dom of  her  colony  government,  24;  the 
sugar  colonies  worse  governed  than  those 
of  France,  20;  increase  in  her  trade  dur- 
ing the  war,  1793-1815,  31;  introduction 
of  woollen  and  cullon  manufactures,  32- 
36;  encourages  nuinufacture  of  linen  in 
Ireland,  45  ;  lack  of  siucess  in  silk 
manufactin'e,  45-46  ;  her  great  inven- 
tions, 30-44,  47-53;  gave  her  wealth  and 
commercial  suprennicy,  44,  53-54  ;  her 
laborers  contrasted  with  the  German, 
88;  trade  if  neutrals  opposed,  during 
war  with  France,  lOK,  115;  orders  in  coun- 
cil, 110-118:  their  ab  lition,  120-124; 
the  war  of  1812,  124;  linauces  of,  1793- 
1815,  120-147;  tariff  of  the  Zollverein 
hostile  to,  172;  the  Zollverein  participates 
in  the  advantages  of.  183-184;  imports  of 
the  Zollverein  from,  194  ;  the  Corn  Laws 
1801-1849.  207-241;  their  abolition,  231- 
233;  repeal  of  the  navigatimi  laws,  239- 
241;  advance  in  general  prices  due  to 
the  new  gold.  252-2")3;  a  corrective  in- 
flow of  silver  to  the  Fast,  250,  209,  276; 
her  use  of  credit,  2.j2,  271-276  ;  com- 
mercial treaty  with  France,  23  ,Ian., 
1800,  295-290;  distribution  system  of, 
302  ;  tonnage  statistics  of,  .305  ;  British 
wheat  niu.ret,  317;  growth  of  her  in- 
dustries, 32!  ;  bills  ou,  in  French  in- 
demnity, 335,  337  ;  licpiidationsof,  1873- 
1876,  355-374;  statistical  and  economi- 
cal comparison  of  cotton  nmnufactures 
in  United  Slates  and,  409-417,  425-427  ; 
consumption  of  iron  and  steel  by,  435; 
increase  of  blast-furnaces,  440;  expense 
of  her  army  and  navy,  453  ;  growth  of 
her  national  wealth,  474  ;  cotlcm  indus- 
tries of,  485-480;  postal  statistics  of, 
490  ;  foreign  trade  of,  492  ;  prices  of 
staple  commodities  in,  493-494;  wages 
of  her  coal  miners,  495  ;  iuvesied  capital 
of,  499  ;  business  failures  in,  502  ;  emi- 
gration from.  .500;  increase  in  nuirriages, 
507  ;  her  navigation  acts,  511-514. 

Greek  colonies,  3. 

Guicnne,  system  of  mctniri"  in,  01  ;  pro- 
vincial assemblies  introduced  into,  74. 

Guilds,   restrictions  imposed    by,   65-67  ; 


INDEX. 


661 


311-317. 


hereditary  poa8e!<sion   salable,  63  ;  at- 
tempt to  abolish,  66, 


Hamilton,  Alexander,  Report  ou  Manu- 
factures, 44a,  54'J. 

Hanse  Towns,  117,  180,  194. 

Hurdenberp:,  agrarian  IcgislatiMi  rf,  in 
1811,  "J8  ;  consists  of  two  edicts,  99  ; 
riglits  commuted  by  first  edict  of,  100 ; 
principles  of  iiulcmuification,  101  ;  rules 
for  giiidaucc  in  tlie  application  of  tliese 
princijiles,  102;  a:;riciiltural  reforms  of 
the  second  edict,  103-104  ;  restrictions 
in  edict  of  1807  removed,  104;  important 
passage  quoted  tnim,  104-100  ;  various 
measures  in,  lOO-luS. 

Hargreuves,  John,  liis  invention  of  the 
spinniiig-jeniiy,  38,  12!). 

Henry  HI.,  restrictions  on  trade  imposed 
by,  85. 

History,  place  in,  of  period  from  1860  to 
183j,  2U8;  summary  of  recent  economic, 
322-325,  469-473,  508-510. 

Holland,  114,  118,  119,  180,  194,  483,  497, 
607. 

Hours  of  labor,  reduction  in,  503-505. 

Human  race,  the,  increased  power  of, 
through  railroad  agencies,  310  ;  com- 
mercial relations  establish  the  unitv  of, 
471-472. 

Immigration,  American,  28-30,  238,  395, 
505-507,  520. 

Imports,  increase  of,  in  England,  1793- 
1815,  31  ;  restrictive  duties  on,  in  Eng- 
land, 40,  207-212;  in  France,  07,  148- 
169  ;  in  Germany,  185-191  ;  effects  of 
decrees  and  orders  in  council,  114,  116- 
121 ;  oscillations  in  receipts  of,  in  Ger- 
many, 1834-1859,  202;  removal  of  duties 
on,  in  England,  211-233;  reduction  of 
duties  on,  in  France,  294-297  ;  varia- 
tions in,  an  economic  symptom,  487, 
491-492;  amount  of,  in  Canada,  525. 

Income  and  property  tax,  introduction  of, 
by  Sir  Robert  Peel,  in  1843,  224;  ex- 
empted, in  England,  1845,  187.5,  475: 
value  of  property  assessed  for,  in  Eng- 
land, 224,  474  ;  in  France,  475  ;  in  Ger- 
many, 476  ;  in  United  States,  478. 

Indemnity,  see  French  Indemnity. 

India,  cotton  manufacture  an  ancient  in- 
dustry in,  34  ;  effects  of  new  gold 
upon,"  252-258,  268-209  ;  due  chiefly  to 
her  absorption  of  silver,  272-270;  reduc- 
tion in  length  of  voyage  to  and  from, 
by  Suez  Canal,  300-306. 


Industries,  tee  Cotton,  Iron  and  Steel,  In- 
ventions, Worlds'  Econoinif-  I'rogresB. 

Interest,  rates  of,  135,  453,  496-497. 

International  relations,  increase  and  im- 
portance of,  409-473. 

Inventions,  John  Kay's  tly-shuttle,  30; 
Robert  Kay's  drop-box,  37;  John  Har- 
grcave's  spinning-jenny,  33;  Richard 
Arkwright's  water-frame,  39  ;  Lowin 
Paul's  revolving  cylinders,  40;  Samuel 
Croiiipton's  mule,  41  ;  Edmund  Cart- 
wright's  power-loom,  43;  James  Watt's 
steain-eiigine,  49;  Dud  Dudley's  smelt- 
ing process,  50  ;  Humphrey  Davy's 
sufely-lamp,  53;  Eli  \\  liitney's  cotton- 
gin,  405;  recent,  eiiiii  icratt'd,  324-325; 
general  effects  of,  53-54,  131,  322-324, 
509-510. 

Ireland,  manufacture  of  linen  in,  45  ;  dis- 
tress in,  233-236  ;  emigration  from, 
237-238. 

Iron,  its  early  use  in  Rritain,  50  ;  the  im- 
petus given  by  Dudley's  smelting  pro- 
cess, 51 ;  effect  of  duties  on,  during  the 
Restoration,  100 ;  exports  of,  from  Zoll- 
vercin,  200-201 ;  world's  production  in 
1880,  445;  iron-ore  in  the  United  Staves, 
529-534. 

Iron,  pig,  increase  in  world's  product  1870- 
1883,  317;  in  England,  484;  in  the 
United  States,  1880-1890,  535-538. 

Iron  and  steel,  effect  of  cheapening  on 
railroad  construction,  318 ;  important 
uses  of,  435-447 ;  steel  production  in 
the  United  States.  538-542. 

Italy,  34,  303,  481,  483,  488,  490,  544. 


Kay,  John,  his  invention  of  the  fly 
Bhuttle,  36. 

Kay,  Robert,  his  invention  of  the  drop- 
box,  37. 

Kendal,  dependent  on  the  woollen  indus- 
try, 32. 


Labor,  liberally  rewarded  in  the  colonies, 
1,  9  ;  restrictions  upon,  by  the  guilds, 
65-08  ;  rights  commuted  by  the  edict  of 
Hardeiiberg,  100  ;  demand  for,  can  only 
increiise  with  increase  of  capital,  130*- 
131  ;  decrease  of,  in  the  management  of 
vessels,  305  ;  displacement  of,  by  ma- 
chinery, 318  ;  in  cotton  mills  of  the 
United  States,  318,  415  ;  advantages 
possessed  in  America,  417-427  ;  cost  of, 
reduced  by  machinery,  428  ;  strikes  a 
symptom  of  its  condition,  504-505 ;  cost 


36 


r-' 

Jo 

^H 

te 

-»nl 

U 

' 

m 

'  iif 

w 

w 

' 

iif' 

' 

s  '1 

1 

>f, 

m 

1 

m 

•1. 

m 

■; 

f''' 

i' 

f ' 

•». 

¥lt    ft 

•li'- 

i'      «,f 

1,:  %.,* 

k 

562 


INDEX. 


'  '4 


of,  in  United    States  iron-oro   miiiitig, 

Lulidrors,  furnirc  (if,  in  Hrilish  American 
CdliinioH,  10;  vfft'cts  (if  tliu  fuudal  xyalcni 
upon,  r)7-(i8  ;  iibnlitidn  oi  "  cimlo  in 
pursuns,"  liy  Sloin,  !12,  94;  I'liaiiuter  of 
Ueinian,  184  ;  dl'  liritisli,  ;i70-;t71  ;  of 
Anii'i'icun,  41ti-421  ,  variations  in  tlie 
foudilidii  of,  an  ccondniii.'  sjniptoni, 
oOJ-5(l4  ;  nuinbur  of,  eniployud  in  tliu 
United  Ututes  iron-ore  mining  inull:^try, 

5;i;i. 

Lufuvettc,  i\Iur(|nid  uf,  liis  American  ex- 
pedition, ".'1-74. 

Land,  (pianiity  of,  an  element  in  coloniza- 
tion, li,  4,  'J,  10;  clas^ilicatidn  (if,  before 
and  after  llie  Kevoiiition.  5(j-r)7;  "caste 
in  land"  uliolislied  by  Stein,  !I2,  04,  UO; 
ograrian  legislatidii  of  llardenberg,  98- 
107  ;  failure  of  crisis,  1845-1840,  234- 
238;  effects  of  improved  transportation 
and  production,  212,  320-321  ;  westward 
progress  of  American  settlement,  375- 
30'J. 

Latin  Monetary  Union,  2!)0. 

Lead,  Uomans  obtained  from  Wales,  50. 

I^vasseur,  li.,  writings  of,  251,  505. 

Licenses,  cdnimercial,  number  of,  1802- 
1811,  (tidte)  120;  evils  of,  during  tlie 
blockade,  120-122. 

Linen  trade,  the,  its  history,  45. 

Loans,  amount  of  money  raised  by,  in 
Englaml  (1801-1821),  i;i5;  two  distinct 
metliods  of  obtaining,  130-141  ;  extent 
of,  by  the  IJank  (if  France  under  the 
Sccoiul  I'jniiire,  285-287  ;  tlnir  employ- 
ment of,  for  payment  of  French  nnlcin- 
nity,  331-332,  338-341  ;  conversion  of, 
454-451);  inveslments  in  public,  an 
ecoiuiniic  symptom,  408-500. 

London,  its  money  market  a  great  distribu- 
tor, 253  ;  and  e(pializer,  358. 

Louis  XVL,  char.'icter  of,  71  ;  abortive 
reforms  by,  72. 

Lowell,  Francis  C,  establishes  first  com- 
plete cotton  factory  at  Waltham,  407. 


Macclesfield,  transfer  of  .silk  trade  from 
SpitaKields  to.  4(1. 

Machinery,  improvements  in  cotton,  So- 
il ;  the  steam  engine,  49-50 ;  enact- 
ments against,  prior  to  French  l^evolu- 
lion,  66;  displacement  of  labdr  by,  318- 
319,  415  ;  epoch  of  elliciint,  32i-325  : 
laws  ogainst  exportation  of,  by  ICngland, 
404;  cotton,  introdnced  into  America  by 
Samuel  Slater.  403-404 ;  Eli  Whitney's 


cotton  gin  as  important  as  inventi(ms  of 
I'lnglisli  cotton  manufacturing,  405  ;  Mr. 
Lowell  sets  up  improved  cotldii,  406- 
407  ;  stdppiig(!  (if,  (luring  American  civil 
war,  414  ;  Uritish  dpcralives,  370-372; 
Anu'rican  operatives,  417-425  ;  cost  of 
labor,  reduced  by,  428  ;  advantages  of, 
430-4.14;  important  iron  products  due 
to,  435-440  ;  recent  advancenu'nt  in  iron 
and  steel,  441-440,  530-537,  530-542. 

Malt^alin,  llaron,  i'e|iorl  of,  to  Mr.  Can. 
niug,  185. 

Manchester,  its  early  prosperity  dependent 
on  wool,  32;  adopts  cotton  ii.dustry,  30. 

Mankind,  we  llinnan  liace. 

Manufactures,  llritish  restraints  on,  in 
North  America,  20;  fostered  by  Colbert, 
06-07;  the  protective  po'icy  of  the  IJesto- 
rati(>;i,  148-169  ;  benelieial  elTects  of  Sir 
liobert  I'eel's  policy,  224-220;  establish- 
ment of,  by  the  /ollvcrein,  172,  181  ; 
growth  of  the  factory  system,  400-409. 

Meats,  cost  of  ocean  transpcirt,  303. 

Merchants,  the  government  of  a  company 
of,  the  worst  possible  for  a  country,  7. 

Metals,  precious,  the  movi'inent  of,  an  ele- 
ment in  the  payment  of  F'rciich  indem- 
nity, 343-347.     See  New  Gold. 

Mexico,  390. 

Milan  decree,  118. 

.Mining,  coal,  51-53;  iron-ore,  529-534. 

Money,  effects  of  an  increased  supply  of, 
244-251,  250-257;  efl'ects  of  a  credit  sys- 
tem, 251-2.")2;  kiiuls  of,  used  in  pay- 
ment of  I'rench  indemnity,  330,  33.3- 
338,  340;  investments  in  credit  institu- 
tions, 408;  C'amiilian  savings,  525. 

Monopolies,  injurious  effects  of  colonial, 
7-8,  15-22;  the  guilds,  05-66;  the  ex- 
ample of  England,  232. 


Nantes,  edict  of,  the  revocation  of,  46. 
Napoleon  I.,  Uerliii  decree  of,  IKi;  Milan 

decree  of,  118;  decree  of  St.  Cloud  and 

of  I''ontaineblean,  1 18.. 
Nations,  increasing  relations  of,  409-473. 
Navigation  Acts,  l'Jig!isli,  enumerated  and 

uncninnerated    connnodilies  of,    15-22; 

repeal    of,    2311-241  ;     leading    sections 

from  the,  511-514;  American,  important 

sections  of,  51.5-519. 
Necker,  appointed  minister,  74;  dismissed, 

75;  restored  to  othcc,  81. 
Neutrals,  historical   sketch   of  England's 

policy    towards,    110-112;    evasion    of 

belligerent   rights  by,   11:1-115  ;  orders 

in  council  against,  110,  117,  118. 


INDEX. 


568 


Neutrality  armed,  principles  of,  109-110; 
ndvuiilaups,  llii-l  15. 

Newcoinuii,  tlic  iiivuiitdr  of  a  steam  engine, 
48;  its  (Iffi'LtH,  48-4!). 

New  Kngland,  iIju  colonial  law  of  .nlierit- 
ant'u,  10;  inipurtanfc  of  its  lisliery,  l(i  ; 
frecclDni  of  its  n"ViTiinu'iit,  'J5;  ihiinKfH 
ill  the  luctdiy  pupiilutKiii,  421  ;  udvaii- 
tnf,'e9  of,  for  nmniifactiircs,  417-4^)4  ; 
reeunt  decrease  in  lier  iron  niannfactiircs, 
5a5. 

Xewfoiindland,  .'lOS. 

New  (iold,  tlic,  cliap.  x;  a  fall  in  value  of 
money  anil  a  rise  of  fjcncral  prices, 
caused  liy,  ■242-'24^J  ;  the  rise  of  prices 
nneipial  iliirin<;  period  of  aii<;mcnlation, 
244;  two-l'old  process  by  which  tlie  in- 
creased production  operates,  245-247  ; 
the  laws  whicli  jjovern  tlie  rise  of  prices, 
247-2il  ;  the  inlluenee  of  difl'erent  cur- 
rencies u|)on  the  course  of  tlie  movement, 
251-257;  a  clniMf^e  in  the  dislrihution 
rather  than  an  increase  in  the  amount 
of  wealth  from,  25'.)  ;  a  loss  to  com- 
mercial nations  (jroduecd  hy,  200  ;  the 
order  and  effects  of  the  movement  upon 
dilTereiit  natKUia,  2li0  275  ;  inllueiices 
developed  hy  the  movement  that  com- 
pensate for  the  loss,  275-2V8  ;  the  un- 
equal rise  of  prices  in  parliciilar  countries 
durini;  the  movement,  278-281. 

Norwich,  the  original  seat  of  the  woollen 
trade,  02. 

(JCE.\N  freights,  reduction  of,  due  to 
economy  in  consumpiion  of  coal  by  com- 
pound engines,  ;J07-.)t)8. 

Operatives,  the  character  of  German,  184; 
of  luiglish,  370-;J72;  of  American,  417- 
425;  average  product  oC,  at  different  pe- 
riod-, in  cotton  milU  of  the  United  States, 
318,  415. 

Orders  in  council,  of  May  Ifi,  180G,  IIG;  of 
Jan.  7,  18:)7,  117;  of  Xov.  11,  1807,  117; 
of  Aprd  2(i,  ]8U:),  118;  Lord  Hrougham 
on,  122-124;  declaialion  by  the  I'rince 
IJegenl  to  revoke,  124;  but  too  late  to 
prevent  llie  war  of  1812,  124. 

Panics,  sef,  Crises. 

Paris,  trade  of,  in  the  18th  century,  G4; 
its  mob  armed  against  the  ministry,  80; 
parliament  of,  demaiicls  an  Assembly  of 
the  States  (Jeneral.  81 ;  treaty  of,  not  the 
cause  of  American  industrial  indepen- 
dence, 401 ;  number  of  new  companies 
established  in,  1881-1884,  500. 


Peasantry,  French,  condition  of,  prior  to 
the  Kevoliition,  57-03;  their  emancipa- 
tion, 82-85;  (lerman,  condition  of,  jirior 
to  the  emancipating  edict  of  Stein,  87- 
88  ;  the  aliolilion  of  caste  in  persons  and 
Herfd(>ni,  !)2-!)(i. 

Peel,  Sir  Hubert,  adiiiiniittration  of,  217; 
his  policy  in  regard  to  the  corn  laws, 
21',)-221;'linaiieial  pidiey  of,  221-225; 
cominereial  policy  of,  225-22t)  ;  re|)eal 
of  the  corn  laws  by,  2.'iU-2.'t3. 

Petty,  Lord  Henry,  new  linancial  depar- 
ture by,  145-14(i". 

Picardy,  siimll  landed  proprietors  of,  fi2. 

Population,  moveinent  of,  an  economic 
symptom,  507-508.  ^'ce  Immigrulion, 
United  .States  Census. 

Portugal,  colonies  of,  5;  in  10th  century  a 
great  naval  power,  (i ;  her  colonial 
government,  25. 

Postal  statistics,  econcnnic  sigiiillcance  of, 
4ilO-4!U. 

Potato,  Ireland  and  the,  2:t:i-2.'18. 

Prices,  low,  of  land  iti  the  colonies,  7  ; 
colonial,  of  Kuropean  goods,  15;  com- 
parison of,  of  bread  hi'fore  and  since 
1781),  (i'J;  of  bread,  in  Kiigland  during 
the  war  (1703-1815),  130;  the  sliding 
scale  regulated  by,  of  wheat,  213,  210- 
222;  increase  in,  of  grain  owing  to  fail- 
ure of  the  potato  crop,  23(1;  effect  of  the 
new  gold  on  general,  242-283;  effect  of 
railroads  and  steamships  on,  314-315; 
of  cottim,  in  relation  to  the  Ameriran 
civil  war,  41  f;  tlieir  economic  signi- 
ficance, \'.)1-V.)\. 

Production,  in  European  colonies,  1-.30; 
an  increase  of,  owing  to  the  great  inven- 
tions, 31,51,  53-54;  low  state  of,  in 
Prance  jirior  to  tlie  Kcvolution,  55-08  ; 
hindered  in  Prussia  by  the  caste  system, 
04;  effects  of  the  proleetive  system  upon, 
of  iron  during  the  Uestoralion,  100  ; 
improved  conditions  of,  in  the  /ollverein, 
184-185;  the  lessened  cost  and  increased 
amount  of,  owing  to  recent  improve- 
ments, 317-320.  comparison  of  intton, 
in  ISfiOand  18811,415;  the  world's,  of  iron 
and  steel  in  1880,  445;  the  ecniiomic 
signilicance  of  varintimis  in  the  world's, 
1870-188,5,  484-4811;  of  coal  and  g(dd 
in  Canada,  525;  of  iron  and  steel  in  the 
United  Stales,  1880-18'.)l),  ,52i)-.542. 

Production  and  distrilnition,  average  sav- 
ing in  time  and  labor  of,  in  recent  years, 
298;  new  conditions  of,  298-325. 

Prussia,  see  Germany,  Stein,  Ilardenberg, 
Zollverein. 


664 


INDEX. 


I'urfliasiiij,' power,  in  France,  09;  in  Eng- 
land, l;iU;  in  America,  4iU. 

(iUITCI,  4. 

KAii.itoAii  construction,  recent  rciliicfion 
in  tlif  cost  of,  ;J12,  :II8;  extent  uf,  uii 
economic  sjinptoMi,  -JSlMUO;  extem<ivo 
line  of  liusaeniur  sliel  in  American,  b'M- 
540. 

Hallways,  introduction  of,  in  Germany, 
18)  ;  extension  of,  in  France,  '287-28!)  ; 
avinif;e  frcii{lit  ciiarnen  of  American, 
;)Ull-;il(l;  economic  ellccts  of,  ail-lllo  ; 
(ierinan  aci|iiisili(in  of,  in  AlHacc-Lor- 
ruine,  JWO-.'MI ;  jnvotmcnis  liy  (iennany 
of  I'reneli  indemnity  in,  'iril  ;  Kpeeiilation 
in,  l)y  new  countries,  'MO;  comparative 
milcatje  in  J881  of,  in  tlie  United  States 
Hiid  oilier  countries,  4'I5  ;  tlie  world's 
mileage,  in  188il,  !!!();  increase  in  Cana- 
dian mileage,  18(18- 18i)l),  r>2r-i. 

Reciprocity  of  foreign  countries,  speech  nf 
Sir  liohert  I'cel  on,  227 -22i);  beiiellts  of, 
4(i!)-47;). 

Rcslauration,  In,  politlrpic  comnierclale  de, 
cliap.  vil.;  de  I'esprit  des  lois  douani- 
cri's,  1-18;  ordonnauce  du  2-'i  avril,  1814, 
1411  ;  I'adminlstration  et  la  Chambre, 
14!) ;  reclamations  contre  rordonnaiice, 
151);  droits  sur  les  fers,  150;  loi  du  17 
dccembrc,  1814,  ITiI;  rapport  de  Rlagnit'- 
Grnndprc/,,  ir)2;  loi  du  28  avril,  1810, 
152;  loi  du  27  mars,  1817, 153;  le  transit 
d' Alsace  retiibli,  154;  protestations  des 
ports  de  mer,  154  ;  loi  de  181!)  .ur 
IVclielle  mobile,  104;  loi  de  1821,  155; 
ges  consequences,  150  ;  reclamations  pro- 
tectlonistes,  150  :  loi  de  1820,  157  ;  loi 
du  27  jiilllet,  1822,  157;  rapport  de 
Bouriennc,  158  ;  les  sucres,  15!)  ;  les 
bestiaux,  100;  les  fers,  100;  prenilfcres 
rt'clamntions  des  manufacturiers  contre 
le  systeme,  100;  pretentions  de  ladroite, 
IGl;  profession  de  foi  du  Ilaron  Saint- 
Cricq,  101;  loi  du  17  mai,  1820,  10.1; 
attitude  du  gouverneinent,  163:  diiU'-iltcs 
du  systeme,  104;  traltcs  de  commerce, 
105  ;  les  ('■tildes  economiques,  105;  ,J.  H. 
Say  et  la  tlii'orle  des  di-boiiclies,  105; 
projet  de  loi  moiliMv  du  ininislere  Mar- 
tignac,  107;  caractcre  du  systeme  pro- 
tecteur.  108;  de  la  fnveur  dont  il  joiiis- 
sait  en  Kurope,  101). 

Revenue,  public,  and  expenditure,  before 
the  Revo!nii(m,  in  France,  75-80;  from 
1792  to'l849  in  Kiiglaiul,  1.34,  143-144; 
18G1-1884  in   the   United  States,   520- 


624;  1808-1890  in  Canada,  625;  muni- 
cipal, in  the  United  States,  542. 

Kuvolutiun,  economic,  due  to  inventionn, 
31,  53-54,  208,  324-325,  405,  415,  501); 
Rocial  and  political,  ate  French  Ruvo- 
lullun,  .Stein. 

Uoebuck,  Dr.,  associated  with  James  Watt, 
4!). 

Romans,  the  advance  of  the  Roman  slower 
than  of  the  (Jrcek  cohmies,  .3. 

Rule,  of  1750,  meaning  of.  111;  relaxation 
of,  112;  of  1708,  neutral  complaints  of, 
112. 

Russell,  Lord  tlohn,  advocates  a  fixed 
duty,  221;  fails  to  form  a  cabinet,  231. 

Russia,  reprisals  agiiiiist,  110;  prolilliitorj' 
tarllT  of,  193  ;  graui  harvest  of,  1888, 
310;  increase  in  i)ublic  debt  since  1870, 
451 ;  restrictions  upon  its  goods  in  the 
English  Navigation  Act«,  512. 


Sau.ino-vksski.s,  decrease  in  number  and 

total  tonnage  of,  300,  308. 
.Savings  banks  nf  ('aiiada,  525. 
Say,  M.  Leon,  Report  of,  discussed,  326- 

350. 
Schecle,  discovers  the  bleaching  properties 

of  o.\yinuriutlc  acid,  43. 
Schiiii,   Thcodor.v.,    bis    opinion    of    the 

edict  of  emancipation,  87,  95. 
Seal  fishery  of  Newfoundland,  changes  in, 

308. 
•Search,  right  of,  neutral  demands,  109. 
Securities,  govcriunent,  investments  in,  an 

economic  symptom,  498-499. 
Serfdom,  abolition  of,  in   France,  84  ;    in 

Oermany,  94. 
Shipping,  increased  cITiciency  of,  300-309; 

eiic(uirageinent  to  American,  519 ;  amount 

of  (^iinadiMi.  525. 
Siemens-Martin  furnace,  446. 
Silk  traile,  tlie,  established  in  England  by 

the  Huguenots,  40. 
Silver,  the  drain  of,  to  the  East,  275-276. 
Sinclair,    Sir  John,   quotations    fr<iin   his 

work  on  the  public  revenue,  132-133. 
.Slater,  Samuel,  erects  first  cotton  factory 

with  liiucliliu'iy  after  K.iigllsh  models  in 

America,  403. 
Socialism,  recent  phases  of,  505. 
Soetbeer,  Dr.,  statistics  of,  476. 
Southern  Slates,  the,  eslim  ited  loss  to,  by 

the  civil  war,  521;  the  rate  of  increase 

of  their  population  an  important  factor  in 

the  census,  527-528  ;  recent  development 

of  the  blast-furnace  industry  in,  536. 
Spain,  the  colonies  of,  4;  her  assertion  of 


INDEX. 


6G6 


can;  munl- 

iiivenlii>iiK, 
•,  415,  m)i»; 
oiiclj   Uuvo- 

lnme8  Watt, 

Oman  slnwor 
I. 

;  relaxatidii 
iiniilaiiitH  of, 

tcH  a  fixed 
liiiicl,  -J.'!!, 
pniliiljilory 
St  (if,  1H88, 
t  since  1870, 
;o(iila  in  the 
12. 


number  and 

cussed,  326- 

ig  properties 

lion    of   the 

5. 

I,  changes  in, 

inds,  lOi). 

tmcnts  in,  an 

I. 

tncc,  84  ;    in 

of,  300-30)1 ; 
Dl'J;  amount 

England  by 

St,  275-276. 
ns    fi'nm   his 

,  i;i2-i:i;3. 
Diioii  fiictory 
sU  models  in 

)5. 

0. 

(1  loss  to,  by 

e  of  increase 

tant  factor  in 

devoliipment 

i'  in,  5:i6. 

'  assertion  of 


an  exclusive  claim  to  all  America,  0; 
policy  of  her  trade  with  tho  colonies, 
14;  cotton  introduced  hy  the  Moors  into, 
'14;  reprisals  against,  ill  180.'),  110;  aug- 
mentation of  debt  niiue  1870,  4&1;  cuii- 
virsiim  iif  its  loan  to  (Julia,  45U, 

Speculation,  see  ('rises. 

.Spices,  5l;l. 

Spindles,  ,lohn  Hargreaves  tho  first  to 
make  use  of  a  nmnlier  of,  38;  total  num- 
ber of,  operated  in  1880,  in  the  cotlon 
mannfaetiire  of  the  I'liited  States,  414. 

States-tjciieral,  demanded,  80;  meeting  of, 
fixed,  81. 

Steam  engine,  invention  of,  48-BOi  effects 
of,  upon  the  priiduetive  energies  of  Great 
Britain,  12Ii-131  ;  ecoiioniie  value  of 
recent  improvements  in,  307. 

Steamers,  ocean,  displace  sailing  vessels, 
300-308 ;  their  increased  ellicieney,  305- 
308. 

Steel,  Bessemer,  value  of  discovery  of, 
312;  substitution  of,  in  place  of  iron, 
312-313;  prompt  introduction  of,  rails 
in  America,  442;  the  United  States  in 
advance  of  other  nations  in  the  use  of 
(1880),  447,  448;  remarltable  increase  in 
'ts  use  from  1880  to  )8!)0  in  the  United 
Slates,  531).     »SVe  Iron  and  Steel. 

Stein,  the  emancipating  edict  of,  decreed 
in  1807, 8(i;  his  own  account  of  the  edict, 
86;  Schiiii's  view  of,  87;  its  threefold 
character,  88;  inoilern  peasant  proprie- 
torship not  included  in,8;(;  a  description 
of,  in  detail,  OO-Ho;  text  of,  05-07. 

Stock,  amount  ami  description  of,  created 
in  Kiigland  from  1801  to  1821,  135;  com- 
parison of  methods  of  funding  debt  in, 
in  3  and  in  5  per  cent  annuities,  137-13!!. 

Strikes,  economic  sigiiilicance  of,  504-505. 

Suez  Canal,  economic  effect  of  its  construc- 
tion, 300-304. 

Sugar,  originally  an  "enumerated"  com- 
modity, 10  ;  nianufiictiiro  of  refined, 
discouraged  in  British  colonies,  20,  2(i; 
increased  coiisiiinptiun  of,  in  1880  in  the 
United  States,  487. 

Suicides,  variations  in  the  number  of,  an 
economic  symptom,  508. 

TahikI'-,  protective,  levied  during  tho 
Uc'^loiation,  148-100;  nature  of,  in  the 
Zollverein,  185-103  ;  prohibitory,  in 
Russia,  i'olnnd,  and  .\ustria,  193;  adop- 
tion of  free  trade  by  Kngland,  207-233. 
Sre  Imports. 

Taxation,  under  Louis  XVI.,  76;  indirect, 
formei'ly  preferred  to  direct,  by  British 


governmentii,  127;  tt  eonimon  sj.'tem  of, 
introduced  by  llio  /(dlverein,  178;  valu- 
ation of  property  lor,  in  the  United 
States,  478. 
Tea,  increased  importation  of,  in  1880  in 
the  United  States  and  France,  487,  488. 
Telegraph,  extent  of  the  electric  system, 
280-200,  310  ;  intlueiice  of,  on  the  con- 
ditions of  commerce,  302,  471;  statistics 
of  its  use,  a  symptom  of  ecouomic  pro- 
gresH,  400-401." 
Textile  inanuliicliires,  early  history  of,  in 
Kngland,  32-38  ;  iniportance  of  the  great 
iiiveiilions  to,  38-40,  53-'i4 ;  resliictions 
upon,  prior  to  1780,  in  I'laiice,  (ill-07 ; 
progress  of,  in  (ieniiaiiy,  181-185;  de- 
velopment of  the  factory  system  in  the 
United  States,  400-408;  nature  and  ex- 
tent of  American  cotton  manufactures, 
400-41U  ;  advantages  of  the  United 
States  for  competition  in,  417-434; 
strikes  of  workmen  in,  505. 
Tilsit,  peace  of,  04. 

Tin,  obtained  by  the  Romans  from  Corn- 
wall, .50. 
Tobacco,   an    "enumerated"   commodity, 
18;  low  duty  upon  colonial,  22;  impor- 
tation of,  in  United  States,  France,  and 
(Jermany,  487,  488. 
Tolosan,  on  the  wealth  of  France,  08. 
Tonnage,  statistics  of  British,  305;  of  the 

woiM's,  308,  400;  of  Canadian,  525. 
Towns,  magistracy  of,  before  the  lie  volu- 
tion, 03-04;  municipal  receipts  and  ex- 
penditures of  100  cities  in  the  Un''"d 
States,  542. 
Trade,  restrictions  upon  colonial,  1.1-24; 
increase  of,  in  England,  1703-1815,  31; 
extent  of,  in  France,  before  and  after  the 
Revolution,  70-71 ;  effect  of  orders  in 
council  upon,  110;  development  of  in- 
ternal, of  the  Zollverein,  178-170;  its 
policy  towards  exteriiiil,  187-105;  eman- 
cipation of  English,  207-233;  iiiflnence 
of  the  new  gold  upon,  250-251,  250,  270- 
271,  270-280;  progress  of,  in  Fr.ince, 
201;  changes  in,  through  the  opening  of 
the  Suez  Canal,  300-304;  effect  of  im- 
proved fransportalion  on,  30.5-817  ;  of 
improved  production,  317-321  ;  charac- 
teristics of  the  depression  in,  1873-1870, 
300;  comparison  of  English  and  United 
Slates  cotton, 400;  illiistralioii  of  Ameri- 
can advanta-ie  for  competition  in  for- 
eign, 42.5-428  ;  statistics  of  Canadian, 
525.  See  Worhl's  Ixpuomic  Progress. 
Transportation,  early  conditions  of,  in 
France,  60;  improved  facilities  of,  in  the 


566 


INDEX. 


ZoIIver<?in,  178-179,  183-184;  mullipli- 
ciitioii  of  means  of,  in  France,  284,  287- 
28'J;  iiiiliienco  of  Suez  Cii'ial  on,  300- 
30-1;  revolution  in  the  carrying  Lrade  on 
tlie  ocean,  305-30!) ;  on  the  land,  30SJ- 
312;  effects  of  improved,  312-317;  eco- 
nomic signilicnnce  of,  48'J-4yO. 

Treaty,  of  Amiens,  110,  l.'iU;  at  A'^ienna, 
124;  between  United  States  and  (ireat 
Britain,  in  1815,  I'Jo;  Aiif^ld-Krench  com- 
mercial, of  18UI),  •J;io-2.Ki;  three  I'ranco- 
Oernniu  treaties  or  conventions  of  1871, 
320. 

Treaties  of  commerce,  of  the  Zollvercin, 
108-201;  of  France,  under  the  Second 
Empire,  202-207;  series  ot  internatiomil, 
470. 

Trianon,  tariff  of,  118, 

Turgot,  on  subdivision  of  land,  Sfi ;  guilds 
abolished  by,  05;  counnercial  Icf^islation, 
67;  measures  of  reform,  72;  dismissed, 
73. 


T'NiTKrt  KiNcnoM,  see.  Great  Britain. 

United  Slates,  the  colonial  progress,  0-25; 
advantii^es  from  neutral  position  of,  in 
the  French  and  Fiifjlish  war,  113-114; 
non-intercourso  act  by,  121;  the  war  of 
1812,  122-124;  pciuc  concluded,  125; 
trade  with  the  /ollvercin,  187;  relief 
sent  to  Ireland,  2:i5:  Irish  emiu'ration  to, 
2;!(i-2.;8:  effects  of  new  pild  in,  252,  254- 
2.57,  275-270;  iiilliii.'iK'e  ol  the  Suez  Canal 
on,  302;  reduction  on  ocean  freight  to 
foreign  countries,  308  ;  railroad  freight 
transportation  of,  310:  transfer  of  its 
western  wl'eat  crop,  317;  displacement 
of  muscular  l.-ibor  in  the  cotton  mills  of, 
318;  crisis  of  ia7-!  in.  350.  350;  railway 
speculation  in,  300;  decline  of  Fnglish 
exiMirls  to,  3<'i2;  low  prices  in,  ."03;  in- 
creased capacity  for  pnidnction  and 
manufacture  of  iron,  370,  372  ;  early 
introduction  of  textile  machinery  in, 
4n0-4'15;  growth  of  the  factory  system, 
405-4'>S:  statistical  (•dinparison  of  cotton 
manufacture  of  (ireat  Untiiin  and,  401); 
cliariicter  tif  the  cotton  fabrics  in  ICiig- 
land  and,  410-413;  advantages  in  indus- 
trial cnmpetiiion  over  Ivimpe  of,  417- 
424;  ability  for  compel il ion  in  foreign 
markets  of.  424-42');  improvements  in 
cotton  manufacture  by,  4'l()-434;  con- 
smnption  of  iron  and  steel  in.  435.  531; 
the  various  uses  of  iron  ami  steel  by, 
435-43!),  540;  progress  of  the  iron  and 
steel   industries,  441-440,  520-542;    na- 


tional wealth  of,  477-470;  consumption 
of  tea  and  coffee  in,  487;  revival  of 
trade  in  1880,  400,  402  ;  statistics  of 
failures  in,  502  ;  variations  in  the  de- 
mand for  laborers,  1870-1885,  503-504; 
strikes  in,  505;  innnigraticjii  returns  of, 
500 ;  increase  of  marriages  in,  an  eco- 
nomic syio))tom,  507;  important  sections 
from  navigation  acts  of,  515-519;  cost 
of  the  (Jivil  War,  520-522;  payment  of 
war  debt  by,  522-524  ;  production  of 
iron  ore  in  1800,  520-534  ;  of  pig  iron, 
535-538;  of  steel,  5:18-542;  municipal  re- 
ceipts and  expenditures  in  100  cities, 
542:  the  national,  state,  and  county  in- 
debtedness, 543-544. 
(inited  States  Census,  of  1700,  375-381; 
of  1810,  381-.383;  of  1820,  38.3-385;  of 
1830,  380-388  ;  of  1840,  388-38!)  ;  of 
1850,3i)0-;i01:  of  1800.  ;i!ll-303;  of  1870, 
303-305;  of  1880,  305-30!);  of  1800,  ,521)- 
528. 


■Vei!saii.i.i:s,  treaty  signed  at,  Jan.,  1871, 

320. 
Vessels,  economy  in  constructi(ni  and  inan- 

ageincnt  of,  305;  sailing,  disappearance 

of,  308. 
Vienna,  crisis  of  1873  begins  in,  350. 
Villainage,  abolition  of,  08. 
Viilier.s,'Mr.,  213,  215,  210,  221. 


Waok.s,  comparison  of,  in  the  18tli  and 
lOtli  centuries  in  France,  08-ll!l ;  demand 
for  labor  can  only  increase  with  increase 
of  capital,  130  ;  necessarily  higl'.er  in 
London  than  in  the  country,  130;  cein- 
parison  of  weekly  wages  in  17!lO  and 
1800,  in  iMigland,  130;  of  cotton-mill 
operatives,  in  Kliode  Island  in  1840  and 
1880,  318;  on  wheat  f:ir]ns  in  the  United 
Stales  and  l'russi;i,  321 :  of  ICnglish  work- 
men, 371  :  of  women  in  cotton  mills  of 
Lowell,  415:  variations  in,  an  economic 
symptom.  4!)4-4!lO;  increase  in,  in  the 
iron  ore  miuieg  iudii-trv  of  the  United 
States  from  1880  to  ISDO,  533. 

War,  cost  of  French,  to  Kugland  1703- 
1815,  124,  131;  co-t  of  In  r  American 
war,  133-134;  mctbo(l  of  payment,  136- 
147;  cost  of  the  .An  'rican  civil,  ,520- 
,522;  the  p.aymeiit  of  the  war  debt,  522- 
524. 

Watt,  James,  his  invention  of  the  steam 
engine,  48-40. 

Wealth,  increase  of,  caused  by  the  groat 


INDEX. 


667 


inventions,  HI,  44;  estimate  of,  in  France, 
08-71 ;  public  iiicdinc  ami  cxpoiKliture 
of  the  L'liik'd  Kiii{;duiii  from  17112-1849, 
134;  liuaucial  [xilii'y  of  Sir  Kobert  I'ed, 
221-2'2'J;  cliaiif^o  in  distribution  ratlier 
than  in  the  increase  of,  from  tlie  new 
gold,  25!)  ;  cost  of  Kranco-tjennan  war  to 
France,  ;J27--i28;  result  of  the  war  on 
German  liiiaiice,  •'iol;  increase  in  na- 
tional, an  evidence  of  economic  pro- 
gress, 474;  in  Great  Britain,  474;  in 
France,  470;  in  Germany,  47(i;  in  Aus- 
tria, 470;  in  the  United  States,  477;  cost 
of  the  American  Civil  War,  520-522  ; 
payment  of  tlie  war  debt,  522-524;  Ca- 
nadian, 525. 

West  Indies,  tlie  remoteness  of,  greatly  in 
favor  of  its  Kurnpoaii  colonies,  4;  the 
sugar  coliiuies  of  Kranc''  belter  governed 
than  tliose  of  Hritaiii,  20;  trade  of,  with 
Europe  carried  on  by  neutrals  during 
the  war,  17i)-M810,  ifl-IU. 

Wheat,  price  of,  in  Kiisl.u-l  in  1801,  207; 
in  181)4,  2(18;  at  the  cmiclusion  of  the 
French  war,  in  1815,  209;  the  sliding 
scale  of  1829  regulated  by  the  price  of, 
213  ;  increase  in  price  of,  owing  to  the 
failure  of  the  potato  crop  in  Ireland, 
236  ;  moiiieiitous  consequences  of  im- 
proved conditions  of  production  and  dis- 
tribution in  the  instance  of,  313-317, 
320-321. 

Whitmore,  Mr.,  his  opinion  of  tlio  corn 
laws,  21 1. 

Whitney,  Kli,  invention  of  the  cotton  gin 
by,  405. 

Woollen  industry,  the  most  ancient  and 
important  in  Great  Britain,  32;  meas- 
ures taken  for  its  promotion,  32-33; 
enactments  against  tlie  exportation  of 
the  machinery,  400-401. 

Work,  reduction  in  the  hours  of,  a  reason 
for  strikes,  504. 

Workingmen,  character  of  the  German, 
184;  condition  of  the  ICnulish,  371;  ad- 
vantages of  the  Amerii'aii,  417-423. 

World's  economic  progress,  the,  1873- 
1885,  clia|).  xvii.;  rapidity  of,  in  recent 
years,  4i)l)-473;  increase  in  national 
wealth,  an  evidence  of,  474;  in  Great 
Britain,  474;   ia  France,  475;  in  Ger- 


many, 47G;  in  Austria,  476;  in  the 
United  States,  477;  causes  of,  47U-481; 
symptomatic  metliod  of  estimating,  dur- 
ing a  fixed  period,  481-482;  primiiry 
symptoms  of,  483;  extent  of  production, 
483-480;  extent  of  consumption,  480- 
489;  changes  in  transportation,  489- 
490;  state  of  the  money  market,  491; 
foreign  trade,  492;  secandary  symptoms 
of,  492;  variation  in  prices,  492-494; 
in  wages,  494-490;  rate  of  discount, 
490-497;  investments  and  dividends, 
497-501  ;  bankruptcies  and  lailures,  502; 
reflective  symptoms  of,  503;  condition 
of  the  working  classes,  503;  strikes,  504; 
immigration  and  emigration,  505-506; 
relative  frequency  of  births,  deaths,  and 
marriages,  507-508;  the  future,  509- 
510. 


Youso,  Artlmr,  travels  in  France  of,  50, 
59,  02,  550. 


ZoLLVEREiN,  the,  motives  for  its  forma- 
tion, 170;  sentiment  of  national  unity 
created  by,  171;  the  union  not  due  to 
commercial  hostility  towards  other 
States,  172-173;  the  various  treaties 
which  preceded  the  final  league,  174- 
170;  its  extent  and  population,  177; 
objects  of,  178;  results  from,  179;  three 
desiderata  of,  180;  future  iiillueiices  of, 
181;  its  facilities  for  inland  trade,  182- 
183;  special  advantages  possessed  bj", 
184;  tariffs  of,    185-193. 

Zollvercin,  le,  historique  de  cette  associa- 
tion, 190:  population  des  l-;tats  associt^s 
en  1801,198;  traiti's  de  commerce  avec 
les  principaux  pays  du  inonde,  198; 
valeur  de  son  commerce  de  1835-1858, 
199;  principaux  produits  importi's  et 
exportes  en  1834,  1844  et  1857,  200; 
commerce  avec  la  France  de  1847-1858, 
201;  recettes  des  douanes  de  1834- 
1S59,  202;  rocettes  en  1858  et  1859 
classees  d'apres  les  I'^tats  de  rUiiion, 
2')3;  partage  de  la  recette  entre  les 
divers  I'^tats,  203;  navigation,  204,  avau- 
toges  du  Zollverein,  2U5> 


